JPM - "Another Hot CPI Report"

In its review of the June U.S. inflation report, JPM noted the "sharp" rise in used car prices, though "industry figures suggest that used car price inflation will cool noticeably in the months ahead". They saw some of the strongest gains, including in new vehicle prices, as being "pushed higher by some of the same semiconductor supply-chain issues affecting used car prices".

• "Travel and tourism prices continued to normalize", while "lodging prices have now returned close to pre-pandemic levels; so, the rapid increase in prices associated with post-pandemic rush could now be mostly behind us."
• "Overall, the fact that recent run-up in inflation has been dominated by a few categories should give the Fed leadership continued confidence in their view that it is mostly a transitory increase, a view which the market apparently shares."
• "The PPI that is released tomorrow will give us more information about PCE inflation for June, but the preliminary reading indicates core PCE would be up 0.4% in June, up 3.5% over a year ago."