MNI US CPI Preview: Core Inflation Seen Easing, Just A Bit

EXECUTIVE SUMMARY

• Consensus has headline CPI inflation rising +1.1% M/M in June after an equally rampant +1.0% M/M as energy accelerated even further on a large rise in gasoline as well electricity price increases.
• Core inflation is seen dipping to a ‘large’ +0.5% M/M (av. 0.54% M/M) after surprisingly accelerating from 0.57% to 0.63% in May for the strongest since Jun’21.
• The report comes with a 75bp hike on Jul 27 seen as locked in and would likely require a very large surprise to change this. However, as in the approach to last week’s strong payrolls, large market moves have opened sizeable two-sided risk to expectations for both the Sep FOMC and meetings further out.
• Please find the full note here.