What is the US June CPI forecast and its implication?

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US June CPI Forecast Suggests Moderation Amidst Inflationary Risks

The consensus forecast for the US June Consumer Price Index (CPI) indicates a moderation in both headline and core inflation rates. Headline inflation is projected to decrease to 3.8 per cent year-on-year from 4.2 per cent in May, while the core CPI is expected to rise by 2.8 per cent, a slight decrease from the previous month's 2.9 per cent increase. Despite this anticipated slowdown, persistent uncertainties surrounding shipping traffic through the Strait of Hormuz could sustain elevated crude oil prices, thereby posing a risk of renewed inflation acceleration.
Moderation in Headline Inflation Expected

Market expectations point towards a noticeable deceleration in the year-on-year US headline inflation for June. The figure is anticipated to settle at 3.8 per cent, marking a decline from the 4.2 per cent recorded in the preceding month. This projection suggests a cooling of overall price pressures in the US economy.
Core CPI Forecast Also Points to Easing

Similarly, the core CPI, which excludes volatile food and energy prices, is also forecast to show a more moderate increase. The consensus estimates a 2.8 per cent rise in the core CPI for June, down from the 2.9 per cent observed in May. This indicates a potential easing of underlying inflationary trends, excluding the more transient components.
Geopolitical Tensions Pose Inflationary Risk

Despite the projected moderation in the CPI data, potential disruptions to shipping traffic through the Strait of Hormuz remain a significant concern. Heightened geopolitical tensions in West Asia could lead to sustained elevated crude oil prices, which in turn could reignite inflationary pressures. This external factor introduces an element of uncertainty and risk to the inflation outlook.

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What is the US June CPI forecast and its implication?

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