US Trend Inflation Is 3%

US core inflation is settling at 3% due to sticky services and the end of the hyper-globalization era. Structural labor supply issues and commodity shocks mean disinflationary offsets are becoming harder to find.

Key Takeaways

• 1.US trend inflation is likely settling at 3% rather than returning to the 2% target, driven by sticky core services.
• 2.Deglobalisation and rising domestic costs are ending the era of core goods disinflation, with tariffs providing further upward pressure.
• 3.Shelter and energy costs are unlikely to provide the disinflationary offset expected by more dovish FOMC members.

Table of Contents

• From the near-term leading indicators, to the big picture
• US core service price outlook
• US shelter prices outlook
• US Core goods outlook
• US consumer transportation price outlook
• US consumer energy price outlook
• US Consumer food price outlook

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial