TEST FROM BANK OF CANADA, PLEASE IGNORE

MNI BRIEF: US Existing Home Sales Fall 5.4% To 3.89M In June

MNI BRIEF: China Wants U.S. Firms To Deepen Investment

MNI China Daily Summary: Tuesday, July 23

MNI: PBOC Net Drains CNY408.7 Bln Via OMO Tues

MNI: PBOC Sets Yuan Parity Lower At 7.1334 Tues; -1.30% Y/Y

MNI: UK APR-JUN MEDIAN PAY AWARDS +4.9% :Brightmine

US Treasury Auction Calendar

BoC Data Watch

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

MNI US Inflation Insight, May'24: CPI In Line After Three Beats But Trend Rates Still Hot

Core CPI moderated as expected in April after three hot monthly prints, but FOMC members will need to see further disinflationary progress to have greater confidence to cut rates

HomepageInflation InsightMarkets

EXECUTIVE SUMMARY

  • Core CPI inflation was in-line with expectations at 0.29% M/M after three months of upside surprises averaging 0.37% M/M in Q1.
  • The three-month rate eased four tenths to 4.1% annualized but the six-month increased a tenth to 4.0% for its third month above the Y/Y rate of 3.6% Y/Y (which eased two tenths).
  • “Supercore” inflation was close to expectations at a still hot 0.42% M/M but it’s at least partly offset by vehicle insurance adding another large 0.19pp as expected and with PCE-relevant insurance far softer.
  • Primary rents were one of the more notable downside surprises in an otherwise mostly as expected report for core items, whilst softer than expected retail sales at the same time helped drive the dovish reaction.
  • Fed rate pricing continues a shift away from hawkish extremes and now entertains a first cut in September again with another cut by year-end.
  • With the burden of proof still to the downside, there will need to be a deterioration in labor data in short order for serious consideration of a July cut (9bp priced).

PLEASE FIND THE FULL REPORT HERE:

USInflationInsightMay2024.pdf


196 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

EXECUTIVE SUMMARY

  • Core CPI inflation was in-line with expectations at 0.29% M/M after three months of upside surprises averaging 0.37% M/M in Q1.
  • The three-month rate eased four tenths to 4.1% annualized but the six-month increased a tenth to 4.0% for its third month above the Y/Y rate of 3.6% Y/Y (which eased two tenths).
  • “Supercore” inflation was close to expectations at a still hot 0.42% M/M but it’s at least partly offset by vehicle insurance adding another large 0.19pp as expected and with PCE-relevant insurance far softer.
  • Primary rents were one of the more notable downside surprises in an otherwise mostly as expected report for core items, whilst softer than expected retail sales at the same time helped drive the dovish reaction.
  • Fed rate pricing continues a shift away from hawkish extremes and now entertains a first cut in September again with another cut by year-end.
  • With the burden of proof still to the downside, there will need to be a deterioration in labor data in short order for serious consideration of a July cut (9bp priced).

PLEASE FIND THE FULL REPORT HERE:

USInflationInsightMay2024.pdf