Soft Cpi Settles A Family Fight

June's softer-than-expected CPI print removes the immediate likelihood of a July Fed hike. However, underlying inflationary pressures from a reheating labour market and resilient household demand suggest the medium-term outlook remains challenging.

Key Takeaways

• 1.June CPI data came in lower than expected, with headline inflation at 3.5% and core at 2.6%.
• 2.The softer print effectively eliminates the case for a Federal Reserve rate hike in July.
• 3.Despite the temporary dip in energy and core prices, the medium-term inflationary outlook remains elevated due to resilient demand and a reheating labour market.

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