U.S. inflation update

Since August 19, U.S. energy futures prices have moved further down as the price of crude oil has fallen below USD40 per barrel. The latest spot and futures prices available suggest that the seasonally adjusted energy component of CPI will drag on monthly headline CPI readings through Q1 of 2015, although the peak effect will likely be felt in Q4 2015. 

"Core CPI of U.S. is expected to be at 2.0% by Q4 2015 (2.1% previously) and to trough at 1.8% in Q2 2016 before resuming a gradual increase in H2 2016 and ending the year at 2.0% (2.2% previously). Headline CPI is expected at 0.7% y/y by the end of 2015 and 0.8% in mid-2016", estimates Barclays.