Fresh inflation data in the form of December’s Consumer Price Index (CPI) showed prices to have risen by 0.4% monthly and 2.9% annually, meeting economist expectations; core CPI — which excludes volatile food and energy costs — saw inflation cooling as prices only increased by 0.2% month-over-month and 3.2% year-over-year, below projections.
PGIM Fixed Income chief US economist Tom Porcelli joins Morning Brief to react to the CPI print and what the inflation data may signify.
Porcelli believes the recent report signals inflation will continue to slow, with factors like softening shelter prices and wage moderation supporting the trend, along with “goods disinflation, which remains in place per this report that we just got.”
Porcelli notes there’s a lot of “evidence to suggest that you can actually see lower inflation by the end of the year.” While inflation may not hit the Federal Reserve’s 2% target, Porcelli expects it to remain close enough for the Fed to be “comfortable.”
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This post was written by Josh Lynch
