US Core CPI Set to Rebound in July: Sticky Inflation Lingers

A recent forecast by TD Securities suggests that US core CPI momentum will rebound in July, indicating sticky inflation pressures. The analysis predicts a 0.2% monthly increase in core CPI, reversing the softer 0.1% gain seen in June.

This expected acceleration is driven by firmness in shelter costs and selected services, partially offset by moderating goods prices. The forecast suggests that while headline inflation may ease, the core measure, excluding food and energy, will maintain a pace consistent with above-target inflation.

As of the latest data, core CPI has been running at an annual rate of 3.3%, well above the Fed's 2% objective. This development could influence the Federal Reserve's upcoming policy decisions, particularly in relation to interest rates.