🛢️🔺Disinflationary Support From Commodity Prices Is Fading: Cable FX Macro
- Rosbel Durán
- Apr 18, 2024
- 1 min read
The chart below shows U.S. CPI, PPI, and a measure of global commodity prices constructed by Bloomberg, all indexes are plotted in Y/y terms
Global commodities are now close to flat, last at -2.7% Y/y, this compares to -25.9% seen over the Summer. The recent uptick in energy prices derived from middle-eastern tensions will not help disinflationary progress across developed markets
While the rise in commodities is likely to affect most major countries, it has been the U.S. that has reported stubbornly high consumer prices
The last time we had global commodities rising by 10% Y/y, this was translated into PPI ticking at 4.6% and CPI at 4.2%. Increments above 20% could see producer prices re-accelerating to 6%
Separately, we recently noted a second round of inflation could see prices rising faster well into 2027 if the U.S. were to follow the pattern seen in the 1970-80s
Comments