JP Morgan: Inflation in America is in its final stages
JPMorgan said that US inflation is in its final stages, and may slow soon, noting that controlling inflation could push bond yields to a peak and support a rally in stocks.
Analysts of the American investment bank, stated in a research note carried by the “Business Insider” website: “We believe that the phase of deceleration in inflation has already begun, and that inflation indicators, whether main or core, will be significantly lower within three to six months.”
JPMorgan expects headline inflation in the United States to reach 5.7% in the first quarter of next year, with core inflation reaching 5.3%, compared to current levels of 8.2% and 6.6%, respectively.
The bank indicated that inflation affects the economy in 4 stages; the prices of basic goods rise first, followed by products, then services, and finally wages.
And “JP Morgan” explained that commodity prices have begun to decline, as metals and energy have fallen by between 20% and 40% from the high levels recorded in the summer. And US natural gas prices have fallen by about 67% since last August.
Analysts said that product prices are now showing signs of decline, as corporate results show fluctuating consumer demand in the third quarter of last year, which may soon be followed by service inflation due to lower rents and improved supply chain disruptions.