CIBC Research discusses its expectations for today's US CPI report for the month of July.
"US inflation has seen the mountaintop, but although its 12-month core pace climbed down a bit in July, it remains at lofty levels. Headline prices advanced 0.5% on the month, leaving them up 5.4% from a year earlier, while excluding food/energy, prices rose 0.3%, to stand up 4.3% year on year," CIBC notes.
"Looking ahead, a stabilizing in oil prices and a likely drop in used car prices at some point will help cool the headline inflation rate, but production bottlenecks and shipping delays remain as upside threats in upcoming months. But the more important issue for the Fed is that solid wage gains this year, ample consumer purchasing power, and tighter labour markets come 2022, could keep core inflation from descending enough to achieve the roughly 2% core PCE price pace that it has penciled in for next year," CIBC adds.