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I saw a couple of statements after the CPI numbers came out this morning that I’m pretty sure were written last night. Almost like Mad Libs with numbers filled in. All comments indicate that inflation figures are still high.
Still, when I spoke with Gisela Hoxha, an economist at Citi US, she sounded upbeat about the numbers. In particular, core inflation was much softer than expected.
Hoxha noted that as inflation has started to decline over the past year, disinflation has been seen mostly in goods prices, while services remain stubbornly high.
That’s changed a bit with today’s numbers, with some of the stickier CPI service components slowing. “This trend has actually shown that some of the service components are softer, such as auto insurance, personal services,” Hoxha said.
Although the shelter index continues to remain high – with a 0.4% monthly increase, but again – these softer numbers could put Fed Chairman Jerome Powell in a better mood at today’s press conference after the Federal Open Committee meeting market.
Hoxha also noted that we expect more data, including labor market data, to be released before the Fed’s next meeting in late July. Citi predicts the Fed will cut interest rates three times this year, in September, November and December. But there is certainly some possibility of July, she said.
We’ll keep you posted as we speak to more of the experts.
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