Deutsche Bank's View on CPI
Going onto more detail on the week ahead, the main event is US CPI on Wednesday. Our economists expect headline CPI to rise +0.57% MoM in September, up from +0.40% in August, largely because seasonally adjusted motor-fuel prices are expected to jump 9.6%. That would lift headline inflation to around 3.64% YoY. The core picture should be much softer: our economists expect +0.16% MoM, down from +0.29%, taking the annual rate down a couple of basis points to 2.39%. Within core, they expect goods prices to be unchanged, with lower used-car and medical-care commodity prices offset by firmer recreation and IT goods. On services, last month’s jump in wireless prices should roll off, although higher jet-fuel costs should support airfares. The contrast between a fuel-driven headline acceleration and a softer underlying core print will clearly be important for the Fed, particularly given recent messaging that further tightening may be needed but is not urgent.
Going onto more detail on the week ahead, the main event is US CPI on Wednesday. 6%. 64% YoY. 39%.
Within core, they expect goods prices to be unchanged, with lower used-car and medical-care commodity prices offset by firmer recreation and IT goods. On services, last month’s jump in wireless prices should roll off, although higher jet-fuel costs should support airfares. The contrast between a fuel-driven headline acceleration and a softer underlying core print will clearly be important for the Fed, particularly given recent messaging that further tightening may be needed but is not urgent.