2026 Inflation Outlook
Analyzing the current state of global inflation and examining major institutions' forecasts for interest rate direction in the second half of 2026.
Global Inflation Overview
In early 2026, the U.S. Consumer Price Index (CPI) rose 2.8% year-over-year, approaching the Fed's 2% target. Europe and Japan are showing similar trends, with the high-inflation phase following the pandemic gradually easing.
South Korea maintains a level of 3.1% as of March, influenced by won depreciation and energy price fluctuations.
Major Institutions' Interest Rate Forecasts
Key Point: Most institutions expect a rate-cutting cycle to begin in the second half of 2026.
Key Variables for Investors
1. Energy Prices
The Middle East situation and the Russia-Ukraine conflict continue to affect energy supply. If oil prices hold at $80 per barrel, there is a risk of inflation reigniting.
2. Services Inflation
Core services inflation, excluding food and energy, remains elevated. Structural factors such as wage increases being passed through to service prices are at play.
3. Dollar Strength
A strong dollar puts pressure on emerging market prices while simultaneously lowering U.S. import prices — a dual effect.
Conclusion
The second half of 2026 is likely to be the inflection point where inflation eases and rate cuts begin. It's essential to closely monitor bond market movements and the Fed's dot plot.