United States: Inflation risks but still contained - TD Securities

TD Securities projects August Core CPI at 0.19% m/m and 2.3% y/y, with services driving gains and core goods slightly negative. Headline CPI is seen at 0.37% m/m and 3.4% y/y on higher energy and food. The bank notes upside risks from assumptions of large price declines in tariff‑exposed goods categories.

Core prices seen under control

"We expect August CPI to report that underlying inflation stayed under control, with core likely rising 0.19% m/m (2.3% y/y). The services segment should be the main driver, while core goods prices likely acted as a drag by posting a modest m/m drop."

"Headline CPI will likely be a stronger 0.37% m/m (3.4% y/y) due to rising energy prices and a slight pickup in food inflation."

"We see the risks to our forecasts as skewed to the upside given that we're assuming a number of large price declines in tariff-exposed goods categories, including apparel and household goods."

"This will also be the first month of PCE with the BEA's revisions, that we expect will push down y/y core inflation around 0.2pp."

"Inflationary risks are still prevalent, which was evident in the respondent comments from last week's ISMs."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)