Headline printed 0.1% MoM, down from 0.4% in the month before. However, prices in the core segment stayed firm, advancing a still strong 0.4% MoM. 

With inflation measures still not showing significant progress, we remain of the view that a final 25 bps Fed rate increase to 5.25%-5.50% remains on the table this week. In our view, if the hard data points to an economy that remains strong enough to make the Fed signal a likely rate hike for July, perhaps it is more optimal to go now.

We also acknowledge that the FOMC has likely entered a risk-management phase, with Fed officials turning more cautious after the rapid accumulation of rate hikes over the past year and rising uncertainty post-SVB collapse. With that said, if the Fed decides to 'skip' a June hike tomorrow, we think it will be hard-pressed to find convincing reasons behind the hard data published since the May FOMC meeting.