US: Why are import prices falling again? – NBF

Krishen Rangasamy, analyst at National Bank Financial, suggests that in the US, the price of imports has failed to take off despite Trump’s tariffs resulting partly in the inflation remaining well under wraps.

Key Quotes

“The import price index actually fell for a third consecutive month in January according to latest data from the BLS. So much so that, on a year-on-year basis, the import price of non-petroleum goods is now in negative territory for the first time in years. So, why are import prices falling again?”

“The U.S. dollar’s surge in 2018 has clearly helped cap the price of imported goods. As today’s Hot Charts show, the declining price of imports from China coincides with the yuan’s depreciation against the USD.”

“The lack of inflation pressures, both domestic and imported, and a flat yield curve arguably restrain the ability of the Federal Reserve to tighten U.S. monetary policy much further.”