November’s Consumer Price Index (CPI) report, to be released on Tuesday, is expected to be little changed month over month due to falling energy prices, according to Bank of America economists.
In a note to clients, they anticipate core inflation moving up from 0.2% to 0.3%, which would equate to the year over year headline CPI rate ticking down a tenth of a percentage to 3.1%, while the core should edge up a 10th to 4.1% year over year.
The economists wrote the expected uptick in core inflation largely reflects swings in volatile components, specifically used car prices and lodging away from home
They added that aside from these swing factors, they expect the data to be relatively supportive of disinflation, due to supply chain improvements as well as rent and owners' equivalent rent (OER) expected to cool slightly month over month.
Bank of America economists concluded by stating that if inflation data come in as expected, it would broadly support their forecast for the first Federal Reserve interest rate cut to come in June, although March remains a possibility if employment and inflation data come in materially weaker than expected.
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