US Inflation to peak at 8.5%, core CPI still expected up 0.4% in April – Societe Generale

Analysts at Societe Generale offer their expectations on the critical US Consumer Price Index (CPI) report due later this Wednesday.

Key quotes

“Seasonally-adjusted gasoline prices are expected to have dropped roughly 5% in April. Home heating and electrical costs should dampen the overall energy price boost to the CPI, but the energy component is key to the 0.2% MoM forecast increase.”

“If this is the case, the YoY measure would fall to 8% from 8.5% in March and raise hopes that the CPI peak pace was set last month.”

“The unknowns regarding energy price pressures linger, however, so we are calling the peak at 8.5%, noting that conviction rests on oil and gas price developments.”

“Core CPI is still expected up 0.4% MoM (5.9% YoY), as rent and shelter components contribute a large share of the index, and they are set for a 0.4% increase.”