Inflation Increment

June inflation fell to 3% Y-o-Y from 4% in May, and from a peak of 9.1% in 6/22. While core inflation rose only 4.8% Y-o-Y, it’s more than double the Fed’s 2% target. Moreover, the Fed’s favorite inflation gauge, service inflation minus housing and energy, was almost unchanged from May. The big decline in headline inflation is primarily because energy was so expensive a year ago. The battle isn’t over.