Global Macro Service > Research Briefings > United States

Firms’ greater pricing power adds to upside inflation risks

We still think inflation will accelerate only moderately in 2019. Inflation expectations remain well-anchored and productivity growth is improving moderately, which should continue to mute the impact from further tightening in the labor market. Thus, we forecast the pace of the Fed’s preferred PCE price index at the core level to increase to just 2.0% next year from 1.9% in 2018.

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