Inflation Trends and Fed Predictions After CPI Release

Headline: Core Inflation Softer Than Expected, Says Citi Economist Gisela Hoxha
Summary:
Following the release of today’s Consumer Price Index (CPI) numbers, there has been a general consensus that inflation remains high. However, Citi US economist Gisela Hoxha provided a more optimistic perspective, highlighting that core inflation was much softer than anticipated. Hoxha pointed out that while disinflation over the past year was primarily seen in goods prices, today’s numbers indicate a slowdown in some persistently high service components, such as auto insurance and personal services.
Notably, the shelter index remains elevated, increasing by 0.4% month-over-month. Despite this, the softer inflation data may influence a more positive outlook from Federal Reserve Chair Jerome Powell during his press conference after the Federal Open Market Committee meeting today.
Looking ahead, Hoxha mentioned that additional data, including labor market statistics, will be released before the next Fed meeting in late July. Citi forecasts that the Fed will implement three interest rate cuts this year, potentially starting as early as July, but more likely in September, November, and December.
Stay tuned as we continue to gather insights from economic experts.