- US: Inflation’s return to 2% will continue to be a slow grind – Wells Fargo
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US: Inflation’s return to 2% will continue to be a slow grind – Wells Fargo
The US Consumer Price Index (CPI) was unchanged in October, the first time monthly inflation was flat since July 2022. Today's CPI report further reinforces Wells Fargo’s view that the last rate hike of this tightening cycle is behind us.
Focus to turn from future rate hikes to future rate cuts
October’s softer-than-expected CPI print is an encouraging development for the FOMC and reinforces our view that the FOMC has ended its hiking cycle. But, we do not see the latest data as a game-changer for inflation’s path ahead.
With inflation in October held down by volatile components like gasoline, travel services and autos, we expect inflation's return to 2% will continue to be a slow grind.
As 2023 draws to a close and 2024 comes into view, we suspect the debate next year will focus squarely on when rate cuts and the end of quantitative tightening will occur.
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