INFLATIONARY IMPLICATIONS

June Y-o-Y inflation was 2.7%, up from 2.4% in May, while core CPI rose 2.9%, up from 2.8% in May. Prior to this month, inflation had been on a slow but steady decline. While the evidence is clearly mixed, car prices fell, tariff-sensitive apparel rose 0.4% M-o-M, household furnishings jumped 1% M-o-M, and appliances soared 1.9% M-o-M. Services inflation fortunately keeps slowing. This report clearly bolsters the Fed’s wait-and-see stance.