Deutsche Bank Flags Energy Shock as Core CPI Forecast Rises 0.27%
Deutsche Bank analysts flag the largest energy supply shock since the 1970s this week, coinciding with Thursday’s final Q4 GDP revision expected at a 0.6% annualized gain versus 0.7% preliminary. They note Friday’s core CPI forecast of a 0.27% rise, lifting year-over-year inflation to 2.66% and shifting Fed policy expectations.
1. Q4 GDP Revision and CPI Outlook
Thursday’s final Q4 GDP revision is expected to show a 0.6% annualized gain versus the preliminary 0.7%, while Friday’s core CPI projection of a 0.27% monthly rise is set to push year-over-year inflation to 2.66%, underscoring persistent price pressures.
2. Energy Supply Shock Emphasis
Deutsche Bank analysts warn that the largest energy supply shock since the 1970s will be fully visible in upcoming data, likely amplifying volatility across commodities and equity markets as supply constraints drive price spikes.
3. Fed Policy Implications
These figures could sway market expectations for Federal Reserve moves; the March FOMC minutes, personal income reports and core PCE data will be crucial for assessing policy responsiveness to elevated inflation and supply-driven risks.