The US Bureau of Labor Statistics (BLS) will release the most important inflation measure, the US Consumer Price Index (CPI) figures, on Wednesday, July 12 at 12:30 GMT. As we get closer to the release time, here are the forecasts by the economists and researchers of 12 major banks regarding the upcoming United States inflation print for the month of June.

Headline CPI decelerated to 4% year-on-year in May – and is expected to continue slowing down to 3.1% YoY in June. Core CPI remained stubbornly high, raising at 5.3% YoY, and expectations stand at 5% YoY for the upcoming release. In MoM terms, headline is expected at 0.3% vs. 0.1% in May and core is expected to have slowed to 0.3% vs. 0.4% in May. 

ANZ

We expect both headline and core CPI inflation to rise by 0.3% MoM in June. Such an outcome would still be too hot for the Fed. Although goods price inflation should remain subdued and further reductions in rent-based inflation are likely to occur, the Fed needs to see more of a slowdown in core services ex-housing to be confident overall inflation is headed to 2% sustainably. For this to happen labour market conditions need to soften further and with it wages growth.

Commerzbank

We expect the core index to increase by 0.3% from May. Compared with the core rates of at least 0.4% recorded since November, this would be a clear step in the right direction from the Fed's perspective, even if only MoM rates of around 0.2% are compatible with its 2% inflation target. Such an outcome would probably not change the prospect of an interest rate hike at the upcoming FOMC meeting on July 25/26 as it has been indicated by Chair Powell. However, as the underlying price pressure should weaken further in the coming months, we do not expect any further rate hikes thereafter. This is also supported by the fact that the headline inflation rate has probably already weakened considerably in June. Overall consumer prices are likely to have risen by only 0.2% from Mayn. The YoY rate would then fall from 4.0% to 3.1%. 

Credit Suisse

We expect core CPI inflation to step meaningfully lower in June to 0.2% MoM. The decline would be welcome for the Fed since core inflation has seemingly been stuck around a monthly run rate of 0.4% so far this year. The YoY reading of core inflation is likely to decline to 4.9%, with headline inflation coming in at 3.1% YoY, continuing its path toward target. A reading in-line with our expectations would represent the lowest run rate for core inflation in 22 months.

ING

A 0.3% MoM reading for headline and core inflation would see the annual rate of headline inflation slowing to 3.1% from 4% and core (ex-food and energy slowing to 5% from 5.3%). While this will do little to alter the likelihood of a July hike, it could at the margin provide a little relief and see longer-dated interest rate expectations tick a little lower.

TDS

Our estimates for the CPI report suggest core price inflation likely lost meaningful momentum in June: We expect it to print 0.2% MoM – the slowest monthly pace for the core since 2021. We also look for a similar 0.2% gain for the headline. Note that our unrounded core CPI inflation forecast is 0.23%, so we judge the risk of a 0.3% m/m advance to be larger than that of 0.1%. Our MoM forecasts imply 3.1%/4.9% YoY for total/core prices.

Deutsche Bank

We expect a +0.20% MoM gain for headline CPI (vs. +0.12% previously) and a +0.28% increase for core (vs. +0.44%) which would have the YoY rate for the former dropping by a full percentage point to 3.1%, while that for the latter would drop by 30 bps to 5.0%, both in line with consensus. This would leave the three (4.6% vs. 5.0%) and six-month annualised (4.8% vs. 5.1%) core rates still well above the Fed’s target.

NBF

The energy component could have had a limited impact on the headline index, as a slight rise in gasoline prices could have been more or less offset by a drop in the utility gas services segment. Expected gains for shelter could still result in a 0.3% monthly increase in headline prices. If we’re right, the year-on-year rate should come down from 4.0% to a 27-month low of 3.1%. The core index could also have advanced 0.3% on a monthly basis, something which would translate into a 5.0% annual gain.

RBC Economics

US headline inflation in June likely slowed to 3.2% on a YoY basis (0.3 MoM), with widespread moderation among food, energy, and other components. Core inflation (ex-food and energy) is expected to decelerate too (5% YoY, 0.3% MoM) as some of the key drivers of recent monthly readings, including rents and used cars, start to turn around following easing in market-posted rent indices and declines in the Manheim used car index.

SocGen

It will be the US turn on Wednesday to reveal just how quickly headline inflation is easing, with another 0.8pp decline in the annual rate. However, the core rate is likely to decline by just 0.3pp and remain high at 5.2% YoY. Indeed, easing headline inflation is likely to increase demand pressures on core inflation, which will only add to central banks’ inclination to continue tightening policy.

CIBC

Base effects will be behind a sharp drop in the pace of annual headline inflation to 3.1% in the US in June, as surging gasoline prices from a year ago drop out of the calculation. That will leave inflation at the slowest pace since March 2021. Excluding food and energy, core price pressures could have also subsided to a pace not seen since late 2021 at 5.0%, with potentially slower inflation in shelter adding to a possible drop in used car prices, in line with industry measures. But all eyes will be on the Fed’s preferred measure of underlying prices tied to demand, core services ex. housing, which will provide an indication of how the tight labor market is feeding through to inflation.

Citi

US core CPI inflation should continue to slow more noticeably in June, with Citi Research forecasting a 0.256% MoM rise, the softest core increase since September 2021. This will likely spur further optimism around easing of inflationary pressures in H2’23. The slowing in core CPI is likely to be a result of further easing in shelter prices (we forecast 0.47% owners’ equivalent rent and 0.50% primary rents) and a drop in used car prices (-0.8% MoM) – both of which should continue to imply easing core CPI over the coming months. Importantly, however, the divergence between core CPI and core PCE could be particularly noticeable this month.

Wells Fargo

We forecast the headline CPI to rise a modest 0.2% in June. Favorable base comparisons due to last year's surge in energy and food prices should set up the year-over-year rate to fall nearly a full percentage point to 3.1%. We look for the core CPI to downshift alongside a decline in core goods prices. The ongoing improvement in supply chains has helped to ease pressure on goods, and we expect vehicle prices to contract in June. At the same time, core services are likely to stay firm. Shelter inflation is only slowly cooling off, while medical care and recreational services have scope to rebound in June. The Fed will welcome the continued moderation in price growth, though the road back to 2% inflation remains long.

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD retreats below 1.0850 after upbeat US PMI data

EUR/USD retreats below 1.0850 after upbeat US PMI data

EUR/USD lost its traction and declined below 1.0850 in the American session on Thursday. Upbeat PMI data from the US, combined with the mixed action seen in Wall Street's main indexes, helps the US Dollar gather strength and weighs on the pair.

EUR/USD News

GBP/USD falls toward 1.2700 as USD benefits from PMI data

GBP/USD falls toward 1.2700 as USD benefits from PMI data

GBP/USD came under modest bearish pressure and declined toward 1.2700 in the second half of the day on Thursday. The US Dollar (USD) benefits from the PMI data, which showed an ongoing expansion in the private sector at an accelerating pace, and weighs on the pair.

GBP/USD News

Gold extends slide below $2,350 as US yields push higher

Gold extends slide below $2,350 as US yields push higher

Gold stays on the back foot and trades at its lowest level in over a week below $2,350. The benchmark 10-year US Treasury bond yield rises more than 1% following the stronger-than-forecast PMI data from the US, forcing XAU/USD to stretch lower.

Gold News

As Ethereum spot ETF approval nears, these altcoins could explode

As Ethereum spot ETF approval nears, these altcoins could explode

It is not surprising that altcoins related to Bitcoin saw a major rally post-Bitcoin spot ETF approval. Likewise, tokens closely related to Ether could ride the ETF approval wave. Ethereum Classic, Pepe, Floki and other DeFi tokens could gain momentum as the ETH ETF approval deadline nears. 

Read more

US S&P Global PMIs Preview: Economic expansion set to persist in May

US S&P Global PMIs Preview: Economic expansion set to persist in May

On Thursday, S&P Global will issue its flash estimates of the United States (US) Purchasing Managers Indexes (PMIs), a monthly survey of business activity. The survey is separated into services and manufacturing output and aggregated into a single statistic, the Composite PMI.

Read more

Forex MAJORS

Cryptocurrencies

Signatures