The core data has been “stickier” than headline, so the drop this time out could get some attention. Core inflation slid to 4.8% on an annual basis from 5.3% the prior month, when analysts had expected 5% or above. The June Consumer Price Index (CPI) report was better than expected across the board, and it could provide another boost to the bullish inflation deceleration narrative.
As a reminder, core inflation is the more important reading to watch, as it excludes volatile food and energy costs. Headline inflation of 0.2% was also better than the expected 0.3% but up from 0.1% the prior month. core consumer inflation growth slowed to 0.2% in June, below analysts’ 0.3% expectations and down from 0.4% in May. inflation provided Wall Street an early lift this morning, but expectations for a rate hike later this month remain extremely high. (Wednesday market open) Comforting news on U.S. Producer Price Index tomorrow morning is up next, along with Thursday speech by Fed’s Waller
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