US inflation surprised to the upside in January – ANZ

Analysts at ANZ noted that the US inflation surprised to the upside in January, with higher energy prices being a significant driver of the solid increase in headline CPI.

Key Quotes:

“Strong above-trend growth and limited spare capacity are providing greater confidence about the return on a sustained basis of core inflation to the FOMC’s 2% target.

A sizable fiscal stimulus in the pipeline is sparking concern of an overheating US economy, which could force the Fed to adopt a more aggressive stance. The March FOMC meeting will be eagerly anticipated as officials will be incorporating recent fiscal measures (Tax Cuts and Job Act and the Bipartisan Budget Act) into their forecasts.”

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