Consumer Price Report expected to show that inflation does not disappear

The Consumer Price Index report is likely to tell a well -known story: another month, another expected Miss for Inflation, as it concerns Federal Reserve’s goals, with concerns lots of what is happening from here.

So instead of looking for hope from the headline readings that are not expected to change much from December, the markets pore will pore through the details of trends that could throw a hope that Fed will eventually be able to start lowering the rates again.

“Inflation is stuck over the target, with risks crooked on the upside, the activity is strong and the labor market seems to have stabilized around full employment,” Bank of America Economist Stephen Juneau said in a note. “If our CPI forecast in January is correct, the case will be too bold to remain on wait further strengthened.”

Bank of America is one of the most pessimistic voices on Wall Street in terms of expecting further bold -flushing.

In fact, the bank’s economists believe that Fed will remain waiting for the rest of the year – and further – as inflation lasts higher, the labor market remains strong and the economy generally remains out of the kind of problems that would require interest rate flow. Dealers are otherwise bold to approve a quarter of percentage point reduction in July and then be set according to CME Group data.

More instantly, Bank of America’s forecast is largely with Dow Jones Outlook for January CPI: A monthly increase of 0.3% for the all-point index and a 12-month inflation of 2.9%, the latter the same as December. Excluded food and energy, the respective core readings are projected to 0.3% and 3.1%, the annual brand just a notch from the 3.2% reading in December.

From a detailed point of view, increases are likely to be driven by increases in car prices and car insurance as well as communication, according to Goldman Sachs. The company expects only moderate pressure down from aircraft prices and most importantly, the tenant-related categories that make up about a third of the CPI weighting and have been largely responsible for inflation that holds over Fed’s 2% target.

Things only get more complicated from here.

While economists expect a good proportion of disinflation from some key categories, President Donald Trump’s tariffs could act as an inflationary counterbalance.

The National Federation of Independent Business Survey For January showed that only 18% of the small business meter reported inflation as their biggest problem, the lowest level since November 2021. Also Cleveland Fed’s first quarter Investigation of corporate inflation expectations showed that CEOs and other top executives see CPI to run at a rate of 3.2% over the next 12 months. Although well over the 2% standard, it is a sharp decline from 3.8% in the fourth quarter.

In the midst of the contradictory information is expected to be set.

Fed -Chairman Jerome Powell on Tuesday said the central bank has no haste to cut down on the rates further, while Cleveland Fed -President Beth Hammack noted that inflation’s persistence could be worsened by customs as a reason for being set.

“While monetary policy must be forward in nature, forecasts are no compensation for realizations. Or as they may have put it in Jerry Maguire, ‘Show me the low inflation,’ Hammack said.