Zhitong Finance APP learned that according to a survey of economists, the US September CPI, scheduled to be released at 20:30 Beijing time on Thursday, is expected to return to its highest level in 40 years, which will highlight the widespread and continue to rise in price pressu

Zhitong Finance APP learned that according to a survey of economists, the US September CPI, scheduled to be announced at 20:30 Beijing time on Thursday, is expected to return to its highest level in 40 years, which will highlight the general and sustained rising price pressure and push Fed to raise interest rates again next month. The

survey shows that the core CPI, excluding food and energy, is expected to rise 0.4% month-on-month and 6.5% year-on-year, the same as the highest level since 1982 in March.

However, based on economists' median estimates, the overall CPI annual rate is expected to slow to 8.1%, affected by the decline in gasoline prices.

There is also a category that needs to be focused on in the report - housing prices, which is expected to become the main driver of inflation. Still, analysts see signs that core inflation has peaked and eventually showed a downward trend, but a decline may take time.

JP Morgan Chief U.S. economist Michael Feroli said: "Inflation may begin to reach its peak, but that said, I don't think inflation will return to lower levels soon, partly because of the continued rise in housing rents."

It is understood that housing prices account for about one-third of the entire CPI index and account for a larger share of the core CPI. The rise in housing rents and housing prices in the past two years has been slowly reflected in the CPI data, which has also stimulated a sharp increase in the rental index of major housing rents and owners' equivalent value.

Before signs of cooling asking rents begin to penetrate government indicators in the near future, these indicators will be a key factor in the final direction of U.S. inflation and will also remain at the bottom for a long time next year.

Fed governor Waller said last week that he is paying close attention to housing inflation to “determine” his outlook for U.S. inflation, reinforces that view. He also pointed out, "Unfortunately, the message is that housing inflation may remain high for several months."

Bloomberg Economy also expects annual growth rates for major housing components not to peak until the second half of next year. Stephen Gallagher, chief American economist at FASIC, believes that the core CPI will drop to 4% relatively quickly in the next year, but he said that it will be "extremely challenging" to continue to decline in inflation while rents are still growing rapidly. He noted that a weaker labor market is needed to slow down rent rises to a level consistent with the Fed's final inflation target.

But even if food, energy and housing prices were excluded, inflation in August was still very high, up 6.4% from the same period last year. Omair Sharif, founder and president of Inflation Insights, a research firm, said that the Fed "has raised interest rates not because of the high housing prices, but because many commodities in the basket are growing at a much faster rate than they expected." Still, “my feeling is that this is the beginning of a more persistent period of weak core CPI data.”

Multiple categories began to weaken

Used car and truck prices were the main drivers of inflation last year, but the market expects that the category will fall for the third straight month and the decline is expected to get bigger. Sharif expects used car prices to fall by 2% in September, which not only reflects the decline in used car wholesale prices, but also reflects the way the government adjusts price data in September each year based on the differences in the quality of new cars in the sample.

Similarly, prices in other categories will also weaken this month or in the near future. For example, retailers have announced large-scale price cuts and sales to clear inventory, and the dollar's strength relative to other currencies may suppress foreign demand for U.S. goods.

Sharif said health care is expected to turn negative from October after steady growth for much of last year.

However, it should be noted that the development of geopolitics may still complicate things in the coming months. At present, the Russian-Ukrainian conflict continues to affect the supply of various commodities, and oil prices rebounded again after OPEC+ agreed to cut production last week.While this may be the "last stop" for high core inflation, Fed officials may not be satisfied with the slowdown in inflation caused by only a few categories. "My personal feeling is that they will want to see a wider slowdown in inflation."