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Wide Range To “Supercore” CPI Estimates For June

US OUTLOOK/OPINION

[From the MNI CPI Preview - see the full report here]

  • The heightened uncertainty around the latest monthly profiles for vehicle insurance and airfares sees a wide range to non-housing core service estimates for June.
  • We’ve seen a range from 0.15% (Nomura) to 0.4% (HSBC) for an average 0.27% M/M. Whilst that would be a bounce after the far softer than expected -0.04% M/M in May – a first decline since Sep’21 – it would still mark continued moderation after the booming 0.60% M/M averaged through Jan-Apr.
  • A 0.27% M/M increase would see the three-month rate slow from 4.2% to 2.7% annualized in June along with far more limited moderation in the six-month from 5.6% to 5.4% annualized.
  • However, market reaction to swings here will no doubt depend on vehicle insurance and airfares, with any outsized moves ultimately being faded ahead of Friday’s PPI and its specific implications for PCE.

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[From the MNI CPI Preview - see the full report here]

  • The heightened uncertainty around the latest monthly profiles for vehicle insurance and airfares sees a wide range to non-housing core service estimates for June.
  • We’ve seen a range from 0.15% (Nomura) to 0.4% (HSBC) for an average 0.27% M/M. Whilst that would be a bounce after the far softer than expected -0.04% M/M in May – a first decline since Sep’21 – it would still mark continued moderation after the booming 0.60% M/M averaged through Jan-Apr.
  • A 0.27% M/M increase would see the three-month rate slow from 4.2% to 2.7% annualized in June along with far more limited moderation in the six-month from 5.6% to 5.4% annualized.
  • However, market reaction to swings here will no doubt depend on vehicle insurance and airfares, with any outsized moves ultimately being faded ahead of Friday’s PPI and its specific implications for PCE.