In the wake of unexpected non-farm payroll data from December, investors are shifting their focus towards the upcoming Consumer Price Index (CPI) data for that same month, which is set to be released next Wednesday. Analysts from Bank of America, Sarah House and Aubrey Woessner, anticipate that overall inflation for December could rise to a five-month high of 2.9%, increasing from 2.7% recorded in November.
Additionally, their analysis indicates that core CPI growth is expected to stabilize at 3.3% for the fourth consecutive month. One of the key points raised by the analysts is the potential stagnation of inflation in the current year. They observe that the deflationary pressures resulting from improved supply chain efficiencies and declining commodity prices have started to wane, leading to the emergence of new challenges, particularly those associated with trade policies.
Thus, a careful examination of both the CPI data and the prevailing economic conditions is essential as these factors could have significant implications for market dynamics and investor strategies moving forward..