ING says possibilities of June lower quashed by yesterday’s CPI

  • Core inflation at 0.4% month-on-month exceeded the
    anticipated 0.3%, lowering the probability of a June Fed price lower.
  • Market expectations for a June lower fell sharply from 15 foundation factors to only 5.5bp following the inflation report.
  • A June lower would probably require payroll progress close to 100k and core CPI at 0.2% within the subsequent reviews.
  • The core CPI’s slight exceedance of expectations continues to be double the tempo wanted for a 2% annual inflation goal.
  • Given
    present inflation tendencies, a Fed price lower earlier than September is inconceivable,
    capping potential cuts at three for the 12 months.
  • Supercore providers led inflation will increase, with notable rises in medical care and transport providers, whereas some classes like autos and airline fares noticed value drops.

This text was written by Arno V Venter at