TD Securities: US May CPI Expected to Cool Off but Remain Elevated, Limited Downside for Year-to-Date Core Inflation

BlockBeats News, June 9th, TD Securities expects that the upcoming US CPI report for May will confirm that inflation is slowing down but still stubbornly high. The institution expects the US May core CPI monthly rate to decrease to 0.23%, staying flat at 2.8% annually; the overall CPI monthly rate to drop to 0.4%, rising to 4.2% annually.

Looking at the breakdown, it is anticipated that in May, commodity prices will rise by 0.13% month-on-month, in line with the three-month average. Among them, core goods excluding automobiles account for most of the increase, with categories such as household goods and clothing seeing rises. The expected further decline in used car prices is expected to partially offset this increase. Furthermore, the continued pass-through of oil price shocks and tariff effects will push core inflation to around 3.0% year-on-year in June. There is an upside risk if aviation fuel costs transmit to ticket prices to a greater extent than expected.

Looking into the second half of 2026, it is anticipated that core inflation will not see a significant decline. Core goods prices excluding automobiles will continue to show strength, while housing costs will tend to normalize at a high level.