观点

Movements in producer prices ex-food and energy serve as a leading indicator of core consumer price inflation and could well partially explain the recently warmer readings with potentially more to come.

Therefore, this wait -and -see approach by potential buyers is expected to weigh on housing demand until trade and geopolitical tensions—along with their resulting impact on expected inflation and purchasing power conditions—start cooling down.-30 -20 -10 0 10 20 NL (St.

Taken together, the CPI and PPI reports have prompted economists to revise higher their forecasts for the core PCE deflator in September, with expectations now centred in the 0.3%-0.4% M/M range.

Her emphasis on upside price risks and still-accommodative financial conditions is consistent with further rate increases in the coming months, with the pace dependent on incoming economic and inflation data.

We will likely get a better understanding of that when numerous working groups will report findings, including on AI and inflation.

For inflation, the headline print was only up by 0.1ppts to 0.9%yoy in September with the core CPI unchanged at 1.0%yoy.

Meanwhile, PPI inflation surged to 5.0%yoy, the fastest pace of expansion since June 2022.

However, consumer confidence slid during the quarter, with the Conference Board’s Consumer Confidence Index deteriorating in September to its lowest level since April 2014 amid anxiety about high energy prices, rising interest rates, and elevated inflation.

In response to upward inflation pressures and the risk of a lengthy period of elevated energy prices, the European Central Bank (ECB) raised interest rates for the second time this year.

Annual headline inflation rose more than expected to a three-year high of 3.8% in September, increasing pressure on the ECB to raise interest rates again by year end.

The September minutes were firmly on the hawkish side, with the discussion focussing on materialising upside risks to inflation.

Still, with a clear focus on inflation risks – which also led us to revise up our near-term CPI forecasts in the October Market Outlook – we still expect a 25bp rate hike at the November meeting.

Over in the US, the headline CPI rose 0.6% as expected in September, taking the annual rate up to 3.7%yr.

We hold a similar view, anticipating that one more hike by year end and a little time will bring inflation near the 2.0%yr medium-term target.

However, as discussed in this month’s Market Outlook, capacity pressures are likely to see inflation consistently above target, rather than below, in coming years – particularly if, as we suspect, capacity in the housing sector remains tight.

This is why we were puzzled by the passage in the RBA minutes this week suggesting that cost pressures reported in business surveys might imply that the unemployment rate consistent with inflation at target (the NAIRU) has risen.

Thus, Australia ended up with wages growth too low to be consistent with inflation at target, and the peculiar spectacle of a central bank governor complaining that wages growth was too low.

The stronger the tendency towards cost-plus pricing, the worse the inflation response to a supply shock.

That adds up to economy-wide behaviour that looks a lot like firms (in aggregate) setting prices according to expected inflation (in aggregate), but under the hood something quite different is going on.

If firms’ beliefs about future economy-wide inflation do not matter much in their pricing decisions, then neither does the credibility of a central bank’s commitment to return inflation to target.

The mechanism to get inflation down then must be simply to weaken demand enough to convince firms that cost-plus will not fly in the market.

It does, however, imply that if supply shocks fade or even self-correct, so will high inflation.

Underlying the move are expectations that inflation will prove persistent globally as well as a belief that the US’ tech sector leaves it best positioned to weather the storm.

New Zealand: Higher fuel costs and a weaker exchange rate have lifted the short-term inflation outlook while the economy has continued to grow through the Iran war.

But a combination of ageing populations, rising labour costs, increasing electricity demand and technology sector developments imply Asia may provide less support to global disinflation over the decade ahead.

Persistent inflation has forced central banks to raise interest rates.

September US inflation came in hotter than expected, with headline CPI accelerating to 3.7% year-on-year and core inflation reaching 2.6%.

Equity weakness is encouraging demand for government bonds, pushing yields lower despite inflation risks.

Sticky inflation, fiscal risks and heavy government borrowing could keep longer-term yields elevated.

The key data to monitor will be employment, consumer spending, business investment and whether inflation pressures continue to broaden.

Core CPI was also firmer than expected, rising 0.3% MoM and 2.6% YoY.

The deterioration in sentiment was driven by concerns over the outlook for interest rates and inflation, ongoing uncertainty surrounding the Middle East conflict, and elevated fuel costs.

While subdued housing costs should continue to contain headline inflation, elevated food and transport costs and imported inflation risks could limit the pace of further disinflation.

Headline CPI rose to 3.7% year on year from 3.4%, above the 3.6% forecast, with the monthly print at 0.6%.

Core inflation increased to 2.6%, with monthly core steady at 0.3%.

Chris Turner PLN: Delayed NBP tightening leaves the zloty vulnerable Final Polish inflation was revised slightly higher to 4.1% from the 4.0% September flash estimate.

Our core inflation forecast is unchanged at 3.1%, down from 3.3%, with today’s release expected to confirm the figure.

All agree that the new forecast and pace of disinflation next year will be decisive.

Wednesday's market gyrations following a hotter-than-expected US inflation report highlighted a potentially important shift in investor sentiment, with implications extending well beyond the bond market.

However, the accompanying weakness in technology stocks raises a broader question: Are investors becoming more concerned about the sustainability of the equity rally than the immediate outlook for inflation and interest rates?

We, like the market, expect a 25bp rate hike at the December meeting given inflation remains elevated and unemployment is low.

Given our inflation and jobs projections, we do not expect additional policy tightening in 2027, despite the market pricing in a further 50bp of hikes.

The Bank’s November inflation forecasts are likely to show CPI briefly above 4%, and that is likely to be the catalyst for a hike, citing previous research that inflation at these levels is historically more likely to trigger second-round effects.

Core CPI stayed unchanged at 0.3% MoM which matched our forecast.

The headline print was slightly above our 0.5% forecast in our preview, while core CPI was in line with our 0.3% call.

On an annual basis, headline inflation picked up to 3.7% YoY from 3.4%, slightly above our approximate 3.6% forecast, while core inflation rose to 2.6% YoY from 2.4%, in line with our forecast.

The upside surprise in headline inflation was largely driven by a sharper than expected increase in fuel prices, which more than offset softer than anticipated increases in food and household energy costs.