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23 Jan 2015
Core inflation set to run lower - DB
FXStreet (Guatemala) - Analysts at Danske Bank noted risk factors around lower oil for the US.
Key Quotes:
"The lower oil price will send US headline inflation into negative territory already next month."
"Real spending power is getting a substantial boost. Private consumption is set to post the best half-year growth rate since 2003."
"On the other hand, investments in the oil and gas extraction industry are set to plunge and will be a drag on GDP growth."
"The net impact on US growth from the lower oil price is clearly positive, even with a negative investment scenario."
"Core inflation is set to trend lower. A stronger dollar means lower import prices and there are potential second-round effects from the drop in energy costs."
"The Fed’s preferred measure of core inflation, the core PCE, is set to move below its comfort zone by mid-year."
Key Quotes:
"The lower oil price will send US headline inflation into negative territory already next month."
"Real spending power is getting a substantial boost. Private consumption is set to post the best half-year growth rate since 2003."
"On the other hand, investments in the oil and gas extraction industry are set to plunge and will be a drag on GDP growth."
"The net impact on US growth from the lower oil price is clearly positive, even with a negative investment scenario."
"Core inflation is set to trend lower. A stronger dollar means lower import prices and there are potential second-round effects from the drop in energy costs."
"The Fed’s preferred measure of core inflation, the core PCE, is set to move below its comfort zone by mid-year."