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CPI tough path ahead

After the good news yesterday on the inflation front, eyes are on the next data point to see if inflation continues to recede and the #fed can change policy, and stop hiking rates. The not so good news is that precisely because June 2022 was the peak for cpi, the next few months will have a tougher comparison, and we could see a spike on cpi. As you can see in the chart below, unless cpi monthly growth stays below 0.2%, the overall index will show a YoY increase, which may give the fed enough reasons to hike twice or even more. On the core cpi front, the #shelter component is the one that can help bringing down the index and help with interanual comparisons.


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Chart source: BoA research.



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