Payden & Rygel: US Consumer Price Index
Payden & Rygel: US Consumer Price Index
Overall CPI increased by 3% year over year vs 3.1% expectations. The index decreased by 0.1% month over month vs. expectations for a 0.1% increase. It was the first monthly decline since May 2020.
Jeffrey Cleveland, Chief Economist, Payden & Rygel made the following comments:
'A surprisingly soft CPI report, with shelter cooling off sharply month-over-month, the softest reading in more than 3 years. Core services ex shelter also soft for the second consecutive month. With the backdrop of the rise in the unemployment rate, policymakers itching for a reason to cut rates will find some evidence here. Still don't think a July cut is likely, but September is likely. In a soft-landing scenario, in which the Fed cuts modestly and growth and inflation moderate, there’s still a limited downside for Treasury yields over the next year (big rallies in Treasuries would occur if growth does indeed slump, not in a soft landing). Risk assets remain in favor, and the dollar should weaken.'