Economists Forecast Inflation Drop to 2.9% in January, Boosting Confidence Prices Are Cooling
• Economists expect January's CPI inflation rate to fall to 2.9%, the lowest since March 2021 and down from 3.4% in December • Markets are confident inflation is improving, with stocks near records and Treasury yields little changed ahead of the data • Any upside inflation surprise could shake up bonds the most and lead to market volatility, though conviction on disinflation remains • The dollar and 10-year yields have climbed on recent upbeat economic data - a hot CPI print could fuel further fixed income upside • While January's data may be clouded by weather and illness, a sub-3% print would reassure markets inflation is moving in the right direction