XLY - Core CPI May Tick Up Before Moderating In The Second Half
The decline in oil prices continues to weigh on headline Consumer Price Index ((CPI)) inflation, which fell 0.3 percentage point to 1.6% year-over-year in January. However, core CPI (which excludes energy and food prices) held steady at 2.2% year over year, with support from normalization in retail prices after holiday discounting late last year.
We expect core CPI to pick up somewhat further in the next few months as rising input costs from the various import tariffs continue to support prices, before moderating to 2.1% in the second half of the year. We view the