US Core CPI Momentum Set to Rebound in July

TD Securities has forecasted that US core CPI momentum will rebound in July, indicating persistent underlying inflation pressures. This projection suggests a monthly increase of 0.2% for core CPI, reversing the softer 0.1% gain seen in June.

The expected acceleration in core CPI is driven by firmness in shelter costs and selected services, partially offset by moderating goods prices. According to TD Securities' analysis, while headline inflation may ease, the core measure, excluding food and energy, will maintain a pace consistent with above-target inflation.

This forecast adds to the debate on the path to 2% inflation, which has been emphasized repeatedly by the Federal Reserve as necessary for adjusting policy. The data will be pivotal for the Federal Reserve's next move, with implications for markets and households alike.