U.S. CPI Preview: Core inflation expected to be moderate, may ease market concerns over interest rate hikes

Odaily Planet Daily News Economists Durie and Wong predict that while the overall U.S. CPI data for May may show strong readings, core inflation, which is more crucial for the Fed's interest rate outlook, should remain moderate, with a month-on-month increase consistent with the 2% inflation target. Although supply shocks have pushed up prices for airfares, home appliances, and electronic products, the softening inflation in the non-essential services sector indicates that consumers are cutting back on non-essential spending.

A set of moderate core inflation data will alleviate market concerns about the Fed raising interest rates following the better-than-expected May non-farm payroll data. The economists stated that they still expect the Fed to cut interest rates by 25 basis points in the fourth quarter of this year. (Jin Shi)