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Thursday, May 16, 2024

US inflation is unlikely to go below 3.5% in 2024 if it continues on its current monthly rate.

US inflation (yoy): 3.4% and US inflation (mom): 0.3%
Since the yearly inflation is affected by the prior year, it is more accurate to analyse the monthly rates.  The US monthly inflation has been sauntering between 0.3-0.4% persistently without any sign of easing.  If this continues throughout 2024, the US inflation won't go below 3.5% in 2024.
If we strip out the volatile factors (food, energy and shelter), we can see from the chart below that the sticky inflation has increased from 2023 and exceeded 3% in 2024.  Thus, we can have more certainty that the US Fed will hold its rates for now.

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