The inflation release on Thursday is the most important release of the week and we find consensus to be decently aligned with the underlying trends in US inflation.

Core inflation is trending around 0.3% MoM in the US and we see no reason for a sharp change in that trend given our price observations and models, and we only see a minor hawkish tilt in our models compared to consensus, but expect the MoM core inflation to print accurately above 0.3%. The consensus change for the MoM core inflation is very close to 0.25% given the expectation of 3.8% YoY inflation. Only a very minor surprise is needed to bring the YoY number to 3.9%, which we find likely. 

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Chart 1: US CPI decomposed