US CPI data for May is due on Tuesday, the day before the announcement of the Federal Reserve decision. According to analysts from Wells Fargo, after a soft reading in April, the index is poised to pick up in May. They see the headline rising 0.3%.
Key Quotes:
“CPI inflation looks set to quickly close in on 3 percent as the FOMC kicks off its June meeting on Tuesday. We look for an above-consensus gain of 0.3 percent for May, pushing the year-over-year change up to 2.8 percent.”
“After a miss in April, core inflation should rise 0.2 percent. May will likely get a modest lift from April’s below-trend reading (0.10 percent vs. A 12-month average of 0.18 percent). Over the past five years, however, May has been a below-average month in terms of monthly gains. Therefore, we see the risks to our 0.2 percent call as fairly balanced. Year-over-year, core CPI should edge up to 2.2 percent.”
“We expect headline CPI to rise 0.3 percent due to higher gas costs and a stronger core reading.”
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