Vertigo3d/iStock via Getty Images BNP Paribas is warning that inflationary pressures are likely to remain persistent, with U.S. price growth settling closer to 3% rather than returning to pre-pandemic norms. In a recent investor report, the bank raised its 2026 forecasts, projecting headline CPI at 3.3% and core CPI at 3.2% on a fourth-quarter basis. A key driver behind the revised outlook is the ...
Vertigo3d/iStock via Getty Images BNP Paribas is warning that inflationary pressures are likely to remain persistent, with U.S. price growth settling closer to 3% rather than returning to pre-pandemic norms. In a recent investor report, the bank raised its 2026 forecasts, projecting headline CPI at 3.3% and core CPI at 3.2% on a fourth-quarter basis. A key driver behind the revised outlook is the recent surge in oil ( CL1:COM ) prices, which BNP Paribas expects will continue feeding into broader inflation. The bank noted that its projections are based on current futures markets but cautioned that a prolonged Middle East conflict could push energy prices—and inflation—higher than anticipated. Beyond energy, shifting dynamics in corporate pricing power are also expected to contribute, it noted. The rebound in wholesale margins suggests retailers may no longer be able to absorb tariff-related costs, increasing the likelihood that higher prices are passed on to consumers. However, not all components are accelerating. The bank revised its rent inflation outlook lower, citing weaker-than-expected growth in market rents. Meanwhile, BNP Paribas expects the gap between PCE and CPI measures to narrow, though core PCE is still projected to run modestly above CPI by late 2026. Market Tracking ETFs: ( DIA ), ( DDM ), ( DOG ), ( DXD ), ( SDOW ), ( SPY ), ( VOO ), ( IVV ), ( RSP ), ( SSO ), ( UPRO ), ( SH ), ( SDS ), ( SPXU ), ( QQQ ), ( QQQM ), ( TQQQ ), ( QID ), and ( SQQQ ). Fixed Income ETFs: ( TLT ), ( TLH ), ( IEF ), ( IEI ), ( SHY ), ( SGOV ), ( SCHO ), ( BIL ), ( AGG ), ( BND ), ( VCIT ), ( MUB ), ( MBB ), ( JNK ), ( LQD ), ( HYG ), ( VTIP ), ( TIP ), ( SCHP ), ( STIP ), ( TIPX ), ( SPIP ), ( WIP ), ( GTIP ), ( LQDI ), and ( RINF ). More on markets Cantor Fitzgerald sees the current market pullback as a possible opportunity The AI Bubble Is Going To Burst Sector breakdown since the start of the U.S.–Iran conflict: Energy leads, materials lags Treasury yields spike as marke...