While those projections should only boost the core CPI by a few basis points at most, the change in methodology comes at a time when getting inflation down to the Fed’s target has proved long and bumpy.

“Disinflation is not always a smooth ride,” Bank of America economists said in a note. “Health insurance inflation should prove to be another source behind our relatively firm core services and core CPI print.”

TD Securities forecasts a much larger impact — a 1.8% monthly rate for the year starting in October, which would add nearly half a percentage point to core inflation in the next 12 months.

The monthly and annual measures of overall CPI are expected to slow in October on retreating gasoline costs. But excluding energy and food prices, the core metric is seen staying at levels above the Fed’s target. 

This article was provided by Bloomberg News.

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