The US April inflation data released at 8:30 tonight will become the focus of much attention.
The current market consensus is that 4 US CPI increased by 0.2% month-on-month and 8.1% year-on-year. The year-on-year increase was 0.4 percentage points lower than in March; the core CPI increased by 0.4% month-on-month and 6% year-on-year. The year-on-year increase was 0.4% higher than that in March. A decrease of 0.5 percentage points.
After the Federal Reserve launched the most aggressive interest rate hike in two decades, the US stock market plummeted. If tonight's CPI data is higher than consensus expectations, the Fed will combat rising inflationary pressures. Amid expectations of substantial interest rate hikes , the U.S. stock market may be under heavy pressure again. On the contrary, the Federal Reserve is likely to maintain the normal process of raising interest rates, and the US stock market may usher in a reversal.
Among the Wall Street investment banks that have made predictions, JPMorgan Chase is the most pessimistic, while Bank of America and Goldman Sachs are relatively optimistic. But overall, Wall Street banks generally expect that U.S. inflation is about to peak, but inflation remains high.
Xiaomo: Core inflation is still hovering at a high level
JPMorgan Chase economist Michael Feroli predicts that the U.S. CPI will increase by 0.4% month-on-month in April, and will increase by 8.3% year-on-year, which is higher than Wall Street’s consensus forecast of 8.1%, but still lower than March. 8.5%.
He believes that signs of inflation and upward trend still exist. While energy prices that soared in March appear to have eased in April (energy CPI is expected to fall 0.2% month-on-month in April), this may be partially offset by strong increases in the prices of food and other goods and services. According to Feroli's forecast, food prices will rise by 0.8% month-on-month in April, and core inflation indicators will rise by 0.39% month-on-month.
Feroli predicts that the year-on-year growth rate of the US core CPI in 4 will drop to 5.9% from 6.5% in March, which is lower than the consensus forecast of the market. but he also warned that core CPI will still hover at a high level.
Feroli believes that the trend of inflation in April is similar to that of rents. Xiaomo Mo expects that tenant rents will increase by 0.47% month-on-month in April, and landlord equivalent rents will increase by 0.43% month-on-month.
Even so, the rent of as one of the main drivers of inflation has peaked with . The data from the apartment rental website ApartmentList shows and 4. The growth rate of monthly rent asking prices has declined year-on-year.
It is worth mentioning that the landlord equivalent rent published by the U.S. Bureau of Labor Statistics (BLS) lags inflation by 5-6 months. Therefore, rents may continue to rise in the next 4-5 months.
New car price increases have slowed down, and used car prices have begun to fall. JPMorgan Chase expects new car prices to rise slightly by 0.1% in April, while used car prices will fall by 2.0%.
It is worth noting that the BLS is changing the way new car prices are calculated. From April, new car prices will be estimated directly based on transaction data from, data and analysis service providers.
Bank of America: CPI dropped significantly to 7.9% year-on-year in April
Compared with JPMorgan Chase, Bank of America is more optimistic. It predicts that the US core CPI will increase by 0.3% month-on-month in April, which is almost the same as March, but lower than the generally expected 0.4%; in view of the smaller base effect of and , the year-on-year growth rate of the US core CPI in April will increase from 6.5% in March. % dropped to 5.9%, which is the same as Xiaomo.
According to the Bank of America’s forecast, CPI increased by 0.07% month-on-month in April and 7.9% year-on-year, which means that inflation did reach its peak in March.
Bank of America expects that the main drivers of inflation in April will be similar to those in March: car prices drag down overall inflation, and underlying inflation is stronger.
Judging from wholesale data, used car prices should contract sharply again, while new car prices may accelerate. JDPower's forecasts and average transaction price data from car trading platform Truecar both show that used cars rebounded strongly in April after three consecutive months of price cuts. At the same time, Bank of America expects that against the backdrop of tight supply chains and rising prices of commodities , prices of various commodities will generally rise.
Like JP Morgan, Bank of America expects that owner-equivalent rents and primary residence rents will continue to strengthen amid a tightening rental market, with accommodation prices rising 0.45% month-on-month in April, but is in contrast to the strong gains in the previous two months. The situation is relatively mild.
Goldman Sachs: Core inflation will accelerate in the second quarter, then fall back
Goldman Sachs will turn its attention to the Fed's preferred consumer inflation measure core PCE price index .
Goldman Sachs believes that the annual rate of the core PCE price index in the past two months (3.5%) has dropped sharply from 6% in the previous four months. It is expected that in the second quarter, the index will re-accelerate to an average of 4.25%, and will fall back to 3.5% and 3.25% in the third and fourth quarters respectively.
Goldman Sachs has three major reasons for this:
First, the inflation rate for supply-constrained durable goods will drop sharply to around 0% , which is also the main reason why Goldman Sachs predicts a slowdown in inflation in 2022.
Secondly, housing inflation has peaked , but the year-on-year growth rate is still above 5%.
Third, inflation in other services sectors will stabilize at a level just above 4% , as an overheated labor market is likely to keep wage pressures unchanged for some time. It is worth mentioning that Goldman Sachs predicted in January and February that there was no risk of a wage-inflation spiral.
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