Citi, TD, Wells Fargo Above-Consensus On Core CPI

While the BBG consensus is +0.4% for June core CPI, several sell-side institutions see a slightly higher figure:

• Citi (+0.51% core): "We see some upside risk to core CPI ... but this is largely driven by strong used-car prices which markets will look-through. A more interesting potential source of upside surprise would be stronger shelter prices (rents) which would be evidence of more durable inflationary pressure. That's possible given the rise in house prices and rapid rebound seen in some other data series that attempt to track residential rents. PPI [out Weds] may get more attention than usual given it has the potential to further any inflationary story evident in CPI."
• TD (+0.6% headline, +0.5% core): "We once again advise against extrapolating, but another surge in travel prices, along with higher gasoline prices, is likely to be reflected in another large rise...We don't expect the large increases in airfares and lodging rates to be reversed, as levels are still below pre-COVID levels, but the rapid rates of increase are highly unlikely to be sustained...The pickup in rents in the CPI in recent months looks like more than noise, as some of last year's migration out of cites is being reversed."
• Wells Fargo (+0.6% Headline, +0.5% Core): Wells Fargo point out the drop in Manheim used car prices, though say it may not show up in the June CPI report due to a lag. "While core goods inflation could continue to moderate from its April high, the goods sector continues to face a host of rising input costs, which it may pass on to consumers. Companies in manufacturing as well as transportation & warehousing have had to bid up wages to attract workers, while transportation and material costs remain elevated."