We are pleased to announce that we are starting to update our inflation forecasts on a weekly basis. Our first weekly forecast is for the United States, where:
- our model expects next week’s US CPI YoY NSA print for January to be 6.2% (revised from 6.04% from our last update in mid January)
- for 12 months out US CPI YoY NSA our model is expecting it to be 2.37% (up from 2.22% in the last update)
- for next week’s US Core CPI YoY NSA print, our model is expecting 5.13%
What’s driving our model prediction for the headline print? In the front end, the largest upside contributor is base effect. Further out, the benchmark contribution becomes more important as an upside component.
Also in the back end, other components which are providing less marginal impact for the upside include US current account, equity volatility. The easing global supply chain pressures provides a small downside contribution in the back end.