Soft US inflation boosts confidence in a return to target

From think.ing.com

The June consumer price inflation report is surprisingly soft and should go some way to boosting the confidence of individual FOMC members that inflation is on the path to the Federal Reserve’s 2% target. Headline CPI fell 0.1% month-on-month rather than rise 0.1% as predicted while core CPI came in at +0.1% MoM versus the +0.2% consensus forecast. Separately, initial jobless claims dipped 17k to 222k and continuing claims held stable, but it is the low CPI print that is dominating the market moves with the 10Y Treasury yield dropping below 4.20% for the first time since late March. The core CPI number is the key ... (full story)