by Simon Moore
Forbes
The Consumer Price Index report for January is expected to show broadly unchanged annual inflation compared to December according to nowcasts. The CPI release is scheduled for February 12. If nowcasts for relatively flat annual inflation hold, then that may reassure the Federal Open Market Committee that inflation is subdued. Nonetheless, further interest rate cuts are not viewed as imminent. Broadly flat inflation would be relatively welcome because headline CPI inflation has accelerated a little since September. Steady inflation would be a positive for policymakers in that context.
The Importance Of Housing
The most important series within CPI inflation is often shelter costs. Shelter carries a significant weight within the index and was increasing at a 4.4% annual rate as of the December CPI report. As such, shelter costs contributed 1.6% to the headline inflation rate of 2.9% on an annual basis to December 2024 given shelter’s 36% weight in the CPI series.