US consumer prices surged again in June, opening the door to another 0.75 percentage point rate lift - perhaps even a full point this month.
US consumer prices surged in June, exceeding expectations and renewing pressure on the Federal Reserve to lift interest rates at a faster pace.: “After May’s upside surprise across all major categories, this report is the second in a row that shows inflation pressures continuing on a broad basis.
We preliminarily forecast core PCE inflation will increase 0.67 per cent on the month in June, and headline up 1.06 per cent. We will finalise this forecast after the PPI data is released next week.”: “Looking into the data, inflation remains embedded within multiple segments of the economy even when stripping away food and energy prices.
“Separately, the ‘food at home’ category rose a still-firm 1.0 per cent m/m after +1.4 per cent and +1.0 per cent m/m in May and April, respectively. ‘Food away from home’ inflation accelerated for a second consecutive month to 0.9 per cent, registering its fastest monthly pace since the 1980s.
“AE expects December Y/Y CPI gains of around 7.0 per cent for the headline and 6.0 per cent for the core. Today’s big boost to the CPI trajectory also trimmed AE’s real growth outlook, as price gains crowd out real spending. AE lowered its headline GDP growth estimates to 1.2 per cent in Q2, 1.7 per cent in Q3, 1.6 per cent in Q4, and 0.7 per cent for 2022 .
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