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Deflation in US?

Reductions in retail energy costs are expected to weigh on the US headline CPI once again in January. US Consumer Price Index will probably print 0.1% lower in January, extending similar declines in the previous month. However, inflation will gradually march towards 2% target unabated.

Recent financial-market turbulence, along with a near halting of real business activity during the final quarter of 2015, has heightened concern about the probability of a recession in the US, but Societe Generale says the probability of such an occurrence remains quite low.

"Fundamental forces likely will fuel a 2.4% increase in the core sub-index over calendar 2016 and a further 2.6% advance by December 2017." said Societe Generale in a report.

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