Monetary Policy & Inflation | US
December CPI Shows Inflation Still Slowing
- By Dominique Dwor-Frecaut
- 3 minutes read
Summary
• Core CPI was 10bp above consensus but distorted by continued supply bottlenecks.
• Trimmed mean and median inflation (more reliable measures of underlying trends) fell further MoM in December.
• Today’s print, together with Powell’s confirmation hearing yesterday, makes me upgrade my forecast of 2022 Fed hikes from three to four.
Market Implications
• Limited, as currently about 3.5 hikes are already priced in.
Summary
• Core CPI was 10bp above consensus but distorted by continued supply bottlenecks.
• Trimmed mean and median inflation (more reliable measures of underlying trends) fell further MoM in December.
• Today’s print, together with Powell’s confirmation hearing yesterday, makes me upgrade my forecast of 2022 Fed hikes from three to four.
Market Implications
• Limited, as currently about 3.5 hikes are already priced in.
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