US: February CPI to show continue upward trend  - Wells Fargo

On Wednesday, Inflation and retail sales data will be released in the US, but the numbers are likely to be offset by the FOMC meeting. According to analysts from Wells Fargo, the CPI reading is likely to show a flat reading for February and a continued upward trend in consumer prices. 

Key Quotes: 

“Inflation is increasingly approaching the Federal Reserve’s target. The January CPI report confirmed that, with prices up 0.6 percent on the month, and 0.3 percent when excluding the volatile food and energy component. Headline CPI inflation was up 2.5 percent over the year, while the core CPI was up 2.3 percent. The transitory effect of low oil prices is largely in the rearview mirror.”

“Meanwhile, prices for food at home have yet to gain traction. The PCE deflator, the Fed’s preferred inflation measure, which was released last week, showed a similar firming, with the core PCE gauge just below the 2 percent target. Recent inflation data have strengthened the case for a March rate hike. We expect February’s reading to show continued upward trend in consumer prices, rising 2.6 percent over the year, but unchanged on the month as we expect some giveback from January’s outsized jump.”