Payden & Rygel: Current US inflation pace to prompt immediate hikes
Data released this week showed that the core Consumer Price Index (CPI) rebounded in July after a flat reading in June, confirming that June's print was a fluke. Overall, core CPI rose 0.22% in July, suggesting that while the current inflation pace is unlikely to be hot enough to prompt immediate hikes, it keeps Fed policymakers on edge amid upside inflation surprises.
Digging deeper into the July CPI print, we find a concerning point: Core goods returned to positive territory after subtracting from core inflation in the last two months, with all but one sector seeing price increases. More specifically, one category, information technology commodities, registered the highest monthly increase since April 2021. Are Al-driven price pressures re-emerging, or is July another "one-time"fluke? With demand for Al products and services continuing seemingly unabated, tech-related price pressures may prove more persistent.