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Consumer Price Index:Historical Releases/2023 June: Difference between revisions
Consumer Price Index:Historical Releases/2023 June (view source)
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However, June numbers were already expected to be positive, and it did not change the market pricing of another hike. Second half of 2023 will be more to imporant to determine the FED path going forward , as we can see in the Bank of America image, even if it stays at 0.2% m/m in headline CPI, we will still have an increase in CPI to almost 4% at year end. So, we will need to see additional disinflation going forward to continue in a declining trend. If not we will actually see inflation increasing again after July, the FED Cleveland is already forecasting July CPI higher than June. | However, June numbers were already expected to be positive, and it did not change the market pricing of another hike. Second half of 2023 will be more to imporant to determine the FED path going forward , as we can see in the Bank of America image, even if it stays at 0.2% m/m in headline CPI, we will still have an increase in CPI to almost 4% at year end. So, we will need to see additional disinflation going forward to continue in a declining trend. If not we will actually see inflation increasing again after July, the FED Cleveland is already forecasting July CPI higher than June. | ||
After CPI numbers, the probability of a hike in July | After June CPI numbers, the probability of a hike in July stayed the same, but a second hike after July is now more in question. <ref>https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html</ref> After July, we will have next meeting until september, and June CPI will be probably be already irrelevant for that decision. | ||
Key Takeaways from June CPI numbers: | Key Takeaways from June CPI numbers: | ||
* Shelter CPI starts to reflect the lags, and its rate of inflation has started to come down . | * Shelter CPI starts to reflect the lags, and its rate of inflation has started to come down . But, we have to remain cautious with shelter CPI, as long as housing prices continue to increase. | ||
* Used car CPI decrease again in June, but the big decline in June | * Used car CPI decrease again in June, but the big decline in June used car prices will be reflected until coming months. Which will put additional presuare to the downside. | ||
* Transportation continues to be very volatile month by month, this month saw an decrease again, but will need to see consistent declines to improve | * Transportation continues to be very volatile month by month, this month saw an decrease again, but will need to see consistent declines to improve, since its y/y contribution continues to be significant. | ||
* Energy | * Energy is having a very negative contribution on headline CPI due to the comps, which will be significant lower after June. Energy has been very volatile, and could be a key component going forward. June energy CPI actually increase m/m, and in July we are already seeing at spike in oil prices. <ref>https://www.reuters.com/markets/commodities/oil-flat-after-bigger-than-expected-build-us-crude-stockpiles-2023-07-12/</ref> | ||
== Outlook == | == Outlook == | ||