US core consumer price inflation came in at 0.4% month-on-month, above the 0.3% consensus – only one forecaster predicted such an outcome so just like last Friday's jobs report this is another significant upside surprise that should quash expectations of a June Federal Reserve interest rate cut. 15bp of cuts were priced ahead of time, but this has now collapsed to just 5.5bp. We have two more jobs reports and two CPI reports, but to deliver a June cut we would likely need to see payrolls growth drop closer to 100k and both core CPI prints to come in at 0.2% MoM – the latter of which is on the day of that 12 June FOMC ... (full story)