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BMO: Above Consensus But PPI Beat Could Limit Reaction

  • BMO note that expectations for headline CPI are toggling around a non-descript headline rise of 0.3% M/M, which would clip the annual inflation rate to roughly 7.3% Y/Y.
  • The risk is for a slightly meatier core result of 0.4% M/M, only shaving the annual pace a tick to 6.2% Y/Y.
  • Given a mild high-side surprise on the PPI, markets would likely readily digest this outcome, and move on to the Fed the next day, but the past two years have certainly taught us to never take the CPI for granted.
  • With beats the norm since early 2021, it would be an important development if the U.S. managed a second consecutive low-end result. Suffice it to say, we doubt that will be the case, especially for core.

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