USD Inflation: 3 charts showing that US inflation will not return to 2% this cycle

More and more signs point to a plateau in inflation in the US, which makes a return to 2% tough in this cycle. The odds are better in the Eurozone, while the UK remains a basket case.

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Based upon public request, we will try to sum-up our inflation projections across the G3 economies and how to play it.

We continue to see a growing divergence between USD- and EUR-flation projections, while there is a short-term window of opportunity in GBP-flation for the BoE.

We remain firm that US inflation will not return to target in this cycle.

USD-flation: 3 charts showing that US inflation will not return to 2% this cycle

The US inflation picture is plateauing at levels above target. That is the unilateral message from the best forward looking indicators on US inflation.

Companies hint that price plans have turned more hawkish since the autumn and the current NFIB response rhymes with a plateau above 3% for the median CPI.

Chart 1: Price plans re-accelerate in the US