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🇺🇸🔺U.S. Inflation Diverging From G10: Cable FX Macro

  • The chart below compares U.S. headline CPI vs the average G10 inflation. This isn't the first time in the post-pandemic era that American prices rise faster than the average developed country

  • What's different is the direction. U.S. inflation is now ticking higher and has surprised economists since January, the latest print came at the top of the forecast range

  • Meanwhile, most G10 countries' prices have extended their disinflationary trend into 2024. In fact, more than half of the G10 CPI prints stand less than 1.0pp above its respective central bank target, Canada and Switzerland prices are currently within target

  • The median forecast sees U.S. CPI slowing down into the end of the year, however, the metric is expected to remain above the Fed's price mandate. Desk chatter is starting to bring up 'no rate cuts' scenarios, hopefully we're wrong on this one.



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