U.S. headline inflation likely to be lower in 2016

Current free fall in energy, commodity and gasoline prices are expected to continue through early spring. Due to this headline inflation in U.S. will be modestly lower for longer period than previously expected.

Moreover retail prices of home heating oil and natural gas prices are also expected to decline over the coming months. 

For the next three months, headline inflation will be higher but the impulse they provide is softer than previous forecast. Looking at the current scenario, Barclays has revised down its inflation forecast for Q4 to 1.4% from 1.5%.