US Core Inflation Momentum Set to Rebound in July: TD Securities

TD Securities has projected that US core Consumer Price Index (CPI) momentum will rebound in July, indicating persistent underlying inflation pressures. This forecast suggests a monthly increase of 0.2% for core CPI, reversing the softer 0.1% gain seen in June.

The expected acceleration is driven by firmness in shelter costs and selected services, partially offset by moderating goods prices. Core CPI has been running at an annual rate of 3.3%, well above the Federal Reserve's 2% objective.

This development could influence the Fed's upcoming policy decisions, with implications for interest rates and monetary policy. Market participants are closely watching this data, as it may alter expectations for the September FOMC meeting.