KEY TAKEAWAYS OF THE WEEK
Economist insights: Increase in US inflation following Hurricane Harvey, PMIs picking up in India (p.1)
› US inflation climbed to 2.2% in September, driven primarily by a 10.6% increase in gasoline prices over the same period, following Hurricane Harvey
› Core inflation remained stable at 1.7%. We expect it to accelerate again slightly over the coming months, confirming our forecast for a 25 bps Fed Funds rate hike in December
› In India, the leading indicators are back in economic expansion territory, tending to confirm the temporary nature of the shock linked to the introduction of the goods and services tax
US focus: Economic cycle set to continue in 2018 (p.3)
› Some indicators have recently fuelled concerns that the economic cycle is nearing its end, including the low unemployment rate and the slowdown in corporate credit…
› …but the moderate acceleration in wages, weak inflationary pressures, the good financial position of households and monetary policy are expected to support activity in the short term
› Alongside this, the dollar’s recent depreciation and the potential tax cuts are also expected to contribute to growth in 2018, which we expect to come in at 2.5%
Macro Highlights - October 16th 2017 - US Inflation, Indian PMIs & Recession signs in the US
