Old Problems New Creation, Will US Inflation Look Back on Its Path?
Data Performance Expectations:
1. Overall Inflation Rises Again: It is expected that the overall inflation in the US will increase by 2.7% year-on-year and 0.3% month-on-month in November, slightly up from 2.6% and 0.2% in October.
2. Core Inflation Remains Sticky: It is expected that the core inflation in the US will rise by 3.3% year-on-year for the third consecutive month and by 0.3% month-on-month for the fourth consecutive month.
Reasons for the Rise/Fall Stagnation of Inflation:
1. Airfare Prices - Goldman Sachs: It is expected that airfare prices will rise by 1% month-on-month, reflecting a strong underlying pricing trend. (Bank of America holds a different view: it expects airfare prices to fall by 1% month-on-month, changing the contribution rate to core inflation from +3 basis points to -1 basis point, bringing the monthly rate down to 0.2%.)
2. Housing Costs - Vanguard: Over the past year and a half, housing prices have been a major driver of inflation, and this stickiness will continue. We really do not see any substantial softening before next year.
3. Energy Prices - Moody's: It is expected that energy costs will drive the overall inflation rate up, and there will be no significant surprises in inflation, but the road to the Federal Reserve's 2% inflation target will be bumpy.
4. Service Sector Inflation - Vanguard: Due to strong wage growth in recent months, service sector inflation may remain high. If wages continue to maintain high growth rates, it will be difficult to keep service sector inflation at a stable level of 2%.
5. Base Effect - Vanguard: The slowdown in the process of inflation retreat is partly attributed to the base effect and partly to the persistent inflation pressure in industries such as services and housing. It is expected that the core CPI in November will grow by 0.25%, slightly lower than general expectations.
6. Trump's Policies -
① Goldman Sachs: Due to the rebalancing of the automobile, rent, and labor markets, inflation is expected to continue to retreat next year, but this progress will also be offset by the escalation of tariff policies.
② Bank of America: The labor market has already rebalanced, and supply constraints have essentially faded, with inflation expectations remaining stable. In other words, considering our expected adjustments to tariff, fiscal, and immigration policies, progress on inflation should stagnate next year.
