CIBC Research reviews today's US June CPI report.

"The monthly pace of US CPI inflation declined in June on the backs of lower gasoline prices. Total CPI decreased 0.4% in June relative to May, lower than the consensus expectation of a 0.1% decline. This was the biggest monthly decline of headline CPI since April 2020. Gasoline prices declined 9.7% in June (the largest contributor to the monthly decline in headline CPI). The monthly decline led to a deceleration in the annual pace of CPI inflation from 4.2% in May to 3.5% in June. The ex. food/energy measure was flat on the month, lower than consensus (+0.2% m/m). Commodities less energy declined 0.1% in June, with widespread monthly decline observed in most components. Shelter decelerated from 0.3% in May to 0.1% in June. Core services ex. rent of shelter declined 0.2% in June, notable monthly declines include telephone services (-3.0%), MV insurance (-2.0%) and health insurance (-0.5%). The annual pace of core inflation declined from 2.9% in May to 2.6% in June," CIBC notes.

"With core inflation coming in below consensus, we believe that should bring some comfort to the hawks at the Fed for the upcoming FOMC decision. We continue to expect the Fed to hold rates in the upcoming FOMC meeting in July," CIBC adds.