Via CIBC, this is in brief from their US CPI preview.
CIBC are in line with the consensus expectation on core prices, citing:
- core CPI prices could have risen by 0.4%, extending April’s momentum, in line with continued strength in the labor market that will have worked to support demand, implying an acceleration in the Fed’s preferred sub-category of services ex. housing.
- The risks to the core figure could be slightly to the downside, as the rent measures could have resumed their deceleration following a temporary pause in April, and used car prices could have declined following a sharp increase in April. Moreover, the ISM services prices paid measure also fell in May.
CIBC add that the implication is for the Federal Open Market Committee (FOMC) to pause at this week’s (statement due Wednesday) meeting. However, the big ‘but’ is:
- if core prices were to accelerate to 0.5% in May, policymakers would be compelled to hike rates in June.
The data is due at 8.30am user, which is 1230 GMT.
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The
numbers in the right-most column are the ‘prior’ (previous
month/quarter as the case may be) result. - The number in the column
next to that, where there is a number, is the consensus median
expected.