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U.S. inflation remained flat with the Consumer Price Index (CPI) steady at 2.4 percent year over year.
Gregory Daco outlined persistent challenges for the inflation outlook, noting that government shutdowns may have understated the true inflation rate by about 0.3 to 0.4 percentage points. He also warned of ongoing tariff passthroughs and the risk of an oil price shock driven by rising gasoline prices.
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Daco’s assessment of inflationary pressures is consistent with his previous exploration of the interplay between inflation and manufacturing trends, as highlighted by the resilient reading in the ISM manufacturing index amid rising prices. These observations follow his broader analysis of macroeconomic dynamics, including persistent shifts in the U.S. trade deficit and the impact of policy adjustments on the wider economy.