June reports suggest that core inflation is now moving lower and risks to our forecast – that core inflation decelerates from a 5%ar in 1H23 to a 3.7%ar this quarter – are shifting to the downside. Much of the near-term downward pressure is coming from core goods inflation. The delayed unwind of supply chain price pressure appears to have taken hold and is combining with the disinflationary impulse associated with manufacturing sector weakness and falling China export prices.

Speakers:

Bruce Kasman

Nora Szentivanyi

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