TD Securities expects US May CPI to show slowing inflation but remain stubbornly
high. Forecasts: core CPI MoM 0.23%, YoY 2.8%; headline CPI MoM 0.4%, YoY 4.2%.
Goods prices are seen rising 0.13% MoM, matching the three-month average, with
non-auto core goods (furniture, apparel) providing most of the gain; used-car
prices are expected to fall again, partly offsetting the rise. Continued
pass-through from the oil shock and tariffs is projected to push core CPI toward
about 3.0% YoY in June; upside risk if jet-fuel costs transmit to airfares more
than expected. Looking to H2 2026, TD sees little scope for a meaningful decline
in core inflation: non-auto core goods should stay firm while housing costs
normalize at an elevated level.
