Grasp the 2024 US CPI forecast trend and seize the asset price change points

Why Should Investors Pay Attention to US CPI Forecasts?

US CPI forecasts directly influence Federal Reserve decisions, and every move by the Fed can shake global asset prices. Compared to other economic data, CPI releases often trigger intense market volatility. Therefore, understanding the predicted trend of US CPI in 2024 is a crucial foundation for developing trading strategies.

US CPI Forecast for 2024: A “V-Shaped” Trend Throughout the Year

According to analyses from multiple authoritative institutions, the 2024 US CPI forecast mainly shows a “low first, then high, followed by a decline” pattern:

Bottom in Q1 → Rebound in Q2 → Drop in the second half

The core logic of this forecast hinges on two points:

First, the low base effect. In the first half of 2023, commodity prices experienced turbulence and decline, resulting in a low comparison base for the first half of 2024. US CPI is unlikely to continue falling rapidly, supported by declining crude oil inventories that bolster oil prices.

Second, external shocks. The US presidential election, geopolitical conflicts impacting global shipping, and the Red Sea crisis have caused freight rates on Eurasian routes to double, increasing logistics costs and pushing up consumer prices.

Interpreting the Three Layers of the 2024 US CPI Forecast

1. US CPI vs US PCE — Market Attention Differences

Investment Tip: CPI is released first; PCE is more scientific. For traders, the year-over-year CPI growth rate signals early opportunities, while for the Fed, the PCE year-over-year rate is the true decision basis.

2. Core CPI vs Overall CPI — Different Focuses

Overall CPI includes volatile food and energy prices, which can be heavily impacted by oil prices, leading to sharp fluctuations; Core CPI excludes these components, better reflecting intrinsic inflation pressures.

In the 2024 US CPI forecast, due to ongoing geopolitical impacts on energy costs, overall CPI volatility will likely exceed that of core CPI.

3. Monthly Growth Rate vs Yearly Growth Rate — Which Should Investors Watch?

Year-over-year growth rate is relatively stable, excludes seasonal factors, and better reflects true trends, making it the key focus for investors.

US CPI Data Release Schedule for 2024

Note the difference between daylight saving time and standard time (Taiwan time):

Breakdown of US CPI Components: Focus on the Two Largest Weights

Two components dominate the US CPI composition:

• Housing and Rent: 30–40% — the largest share
• Food and Beverages: 13–15% — the second largest

Other items include healthcare (7–9%), education and communication (6–7%), transportation (5–6%), new and used vehicle prices (5–8%), among others, with relatively dispersed weights.

Investment Insight: Monitoring trends in rent and food prices can often provide early signals of the US CPI forecast direction.

Two Core Forces Driving Changes in the 2024 US CPI Forecast

Force 1: Inflation Effects of the US Election

The November 2024 US presidential election will be the most significant political event of the year. Regardless of the candidate, there may be excessive promises to win votes, leading to increased fiscal spending. Additionally, escalating geopolitical tensions could boost defense expenditures, ultimately making it difficult for prices to decline smoothly.

Force 2: Reverse Transmission from the Fed’s Rate Cut Pace

According to CME Group’s probability forecasts, the market believes the highest chance is for the Fed to cut rates by 6 basis points in 2024. This indicates a relatively optimistic outlook for US CPI in 2024, expecting a downward trend in prices throughout the year.

However, this expectation may deviate from reality, as supply-side factors like the Red Sea crisis and geopolitical conflicts could exert upward pressure on CPI.

Historical Perspective on the 2024 US CPI Forecast

Over the past 30 years, the US has experienced four CPI cycles:

1990-1991: Savings and Loan Crisis + Gulf War → Recession → CPI declines

2000-2001: Dot-com Bubble + 9/11 → Economic shock → CPI declines

2008-2009: Subprime Crisis → Financial Crisis → CPI declines

2020–Present: Pandemic impact → Global logistics disruption → CPI first drops then rises, peaking in June 2022, then gradually falling

Key Finding: Global logistics conditions have a huge impact on US CPI forecasts. The Red Sea crisis since December 2023 has again disrupted logistics patterns, with freight rates on Eurasian routes doubling. While not as severe as during the pandemic in 2020–2021, it still raises transportation costs and ultimately influences consumer prices.

Fundamental Support for the 2024 US CPI Forecast

The International Monetary Fund (IMF) latest projections for 2024 indicate:

• Global GDP growth: 3.1% (up 0.2%)
• US GDP growth: 2.1% (second among major developed countries)
• Global inflation rate: 5.8% (down from 2023)

What does this data suggest? The US economy remains resilient beyond expectations, implying that the US CPI forecast for 2024 will likely not decline rapidly to very low levels. Steady economic growth often accompanies inflationary pressures.

Practical Recommendations for Traders

Based on the above analysis of the 2024 US CPI forecast, traders might consider the following strategic framework:

Q1 (Bottoming phase): US CPI forecast hits the annual low; markets may preemptively price in rate cuts. Defensive assets could perform better.

Q2 (Rebound phase): CPI forecast rises; geopolitical conflicts and election expectations push prices higher. The Fed may delay rate cuts, pressuring stocks, while commodities rebound.

H2 (Decline phase): If geopolitical tensions ease and global logistics normalize, US CPI forecasts decline again. This could present rebound opportunities for risk assets.

Conclusion

The key word for the 2024 US CPI forecast is “uncertainty.” While economic fundamentals are solid and rate cut expectations are clear, political uncertainties during election year, supply shocks from geopolitical conflicts, and fragile global logistics will increase CPI volatility.

For investors concerned with global asset prices, each CPI data release in 2024 could be a market turning point. Mastering this schedule and trend forecasts allows for proactive positioning.