TD Securities: US May CPI expected to cool but still remain high, limited room for core inflation to decline this year

BlockBeats News, June 9 — TD Securities expects that the upcoming U.S. May CPI report will confirm that inflation is slowing but remains stubbornly high. The firm expects that the core CPI month-over-month in the U.S. for May will fall to 0.23%, with the year-over-year rate staying at 2.8%; the overall CPI month-over-month will decline to 0.4%, with the year-over-year rate rising to 4.2%.

By component, May’s goods prices are expected to rise 0.13% month-over-month, unchanged from the three-month average. Among these, core goods excluding automobiles are expected to account for most of the increase, while categories such as home goods and apparel are also expected to see gains. It is expected that a further decline in used car prices will partially offset this increase. In addition, the continued pass-through of oil price shocks and the impact of tariffs is expected to push core inflation to around 3.0% year-over-year in June. If airline fuel costs are transmitted to ticket prices by a greater-than-expected margin, there is upside risk.

Looking ahead to the second half of 2026, core inflation is not expected to show any meaningful decline. Core goods prices excluding automobiles will continue to show strength, and housing costs will normalize from elevated levels.