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U.S. Inflation Outlook: A Meaningful Shift in the Second Half of 2023
June Consumer Price Index (CPI) inflation data confirms our view that the U.S. economy may look very different in the second half of 2023. After core inflation decelerated very little through the first five months of the year, we are seeing disinflation in the CPI report and in other leading indicators consistent with a much slower pace of core inflation in the rest of the year. Despite notable downside surprises in the June data for U.S. CPI inflation as well as a more moderate employment report, we still believe the Federal Reserve is likely to raise the policy rate 25 basis points (bps) in July. But the moderating ... (full story)