📝Forecast U.S. Headline CPI At 2.0%-2.5% Range By April: ING

There are some components on which there is less certainty, such as medical care, but we are increasingly confident that inflationary pressures will continue to subside and this means that the Federal Reserve will not need to raise interest rates any further.

We forecast headline inflation to be in a 2-2.5% range from April onwards with core CPI testing 2% in the second quarter.

With growth concerns likely to increase over the same period, this should give the Fed the flexibility to respond with interest rate cuts. We wouldn’t necessarily describe it as stimulus, but rather to move monetary policy to a more neutral footing, with the Fed funds rate expected to end 2024 at 4% versus the consensus forecast and market pricing of 4.5%.- ING