US CPI data is coming up on Thursday, and you don't have to look far to find forecasts +4%for the headline and core +3%.
- Median consensus at this stage are for 4.7% and 3.4% respectively
- data due at 1230GMT
THE question, of course, is if this surge is 'transitory' or note.
Goldman Sachs expects the rates to have dropped by year end:
- Our economists recently raised their near-term inflation forecasts while maintaining their expectation that inflation will begin to abate later in the year.
- In April, both core PCE (+3.1% y/y) and core CPI (+3.0% y/y) exceeded expectations and notched highs not seen in more than two decades.
- Our economists that core PCE will register 2.5% at the end of 2021 and decline to 2.1% during 2022.
JPM are not so sure ...
- Inflation expectations have also increased beyond what may be achievable in the near term.
- Inflation is on the upswing in our view and will eventually surpass the Fed's targets on a sustainable basis
- However, expectations have increased too and now price this rise in many asset markets
