CPI inflation for June is a very important data point for markets. It may confirm disinflationary processes - because according to consensus, this may be the second month in a row of dovish readings.
Wall Street expects only +0.07% MoM for headline inflation – Figure 1. In May, the monthly change was only +0.01%. A reading of 0.07% will bring the annual inflation rate down to 3.11% (from 3.25% in May, seasonally adjusted series).
For core inflation, Wall Street expects +0.22% (after a fantastic May of +0.16%). Such a reading will slightly increase the annual core inflation from 3.41% to 3.44% (applies to the seasonally adjusted series).
Attached a graphic with Wall Street expectations (source: Wall Street Journal).
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