22 Jul 2014
US CPI to hold above 2% y/y - RBS
FXStreet (Bali) - RBS expects both headline and core CPI in the US to hold above 2.0% y/y in June.
Key Quotes
"We anticipate both headline and core CPI in June will hold above 2.0% y/y in June. At her June FOMC press conference, Chair Yellen responded to a question about recent strength in inflation by noting that “the data that we’re seeing is noisy” and that “broadly speaking, inflation is evolving in line with the committee’s expectations.”
"The FOMC’s ability to stay dovish on monetary policy likely relies chiefly on that underlying expectation that inflation will return only gradually to target, meaning that it would likely take strength in inflation indicators (or even consistent inflation readings at or close to target) to motivate a hawkish change in tone."
"We see growing signs of a shift in strategy away from structured forward guidance toward a more wholly data-dependent framework. Data dependence does not necessarily equate to hawkishness, but that change, if and when it does become formalized in the language, would likely be a USD positive in an environment of inflation picking up and broad improvement in labour market indicators."
Key Quotes
"We anticipate both headline and core CPI in June will hold above 2.0% y/y in June. At her June FOMC press conference, Chair Yellen responded to a question about recent strength in inflation by noting that “the data that we’re seeing is noisy” and that “broadly speaking, inflation is evolving in line with the committee’s expectations.”
"The FOMC’s ability to stay dovish on monetary policy likely relies chiefly on that underlying expectation that inflation will return only gradually to target, meaning that it would likely take strength in inflation indicators (or even consistent inflation readings at or close to target) to motivate a hawkish change in tone."
"We see growing signs of a shift in strategy away from structured forward guidance toward a more wholly data-dependent framework. Data dependence does not necessarily equate to hawkishness, but that change, if and when it does become formalized in the language, would likely be a USD positive in an environment of inflation picking up and broad improvement in labour market indicators."