RISING US INFLATION RISKS
Used vehicle prices are among the most striking evidence of gathering US inflationary pressure. Data from car auction house Manheim show they're up more than 50% y/y in the first two weeks of April, with base effects accounting for only a small part of the increase. We're forecasting US inflation to rise 3.6% by May but Michael Pearce, our Senior US Economist, says the risks of an even bigger and more sustained rise in inflation are rising.
"The Fed will argue that is mostly transitory. With wage pressures elevated and inflation expectations increasing, however, we expect core inflation to average 2.5% in 2022 and 2023," Michael says.
Published: 23rd April, 2021