The key points
In June, US headline CPI inflation rose at an annual rate of 2.7 per cent, slightly above market expectations?
Core CPI at 2.9 per cent was in line with expectations, but signs of tariff-driven inflation continue to build in key categories, suggesting that broader price rises are in the pipeline in the months ahead
The verdict
US headline and core CPI inflation were well-behaved in June, coming in roughly in line with expectations. But rather than the aggregated figures, we think the focus of rate-setters at the Federal Reserve will be on inflation dynamics in import-heavy goods categories.
With sharp jumps registered in monthly prices for goods such as furnishings and toys, the data supports the thesis that tariff price pressures are building within the US economy and, at the margin, bolsters the case for an extended interest rate hold.
The details
The headline rate of US CPI rose 2.7 per cent in June, according to data released on Tuesday, slightly above market expectations of a 2.6 per cent rise and above May’s 2.4 per cent rise.