The Weekly Brief - J.P. Morgan Asset Management

The Weekly Brief

Contributor Global Markets Insights Strategy Team

US headline and core inflation for March both moved above 2% year on year (y/y). The headline index grew by 2.4% (y/y) and core inflation reached 2.1% (y/y).

This increase can be partially attributed to the fading effect of lower mobile phone service costs, which fell significantly this time last year. Despite a marginal drag from lower energy prices last month, this inflation release suggests that as the labour market tightens, inflation could continue to edge higher. The Personal Consumption Expenditure index, which is the US Federal Reserve’s (the Fed’s) preferred measure of price increases, could therefore reach their 2.0% target soon. This, combined with fiscal tailwinds, should lead to a further three rate hikes by the Fed in 2018 – one hike more than the median Fed dot plot currently forecasts.

US headline and core inflation both above 2%

Source: BLS, Thomson Reuters Datastream, J.P. Morgan Asset Management. Data as of 13 April 2018.

The Weekly Brief (16 April 2018)

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