US CPI: 2023 inflation forecast update

Major disinflation likely lies ahead in May and June, which is likely to ramp up pressure on the Fed to cut interest rates during 2H23.

In terms of the inflation debate, the next two months are likely to be of critical importance, with MAJOR disinflation likely on the way — I currently forecast a decline in the CPI and CPI ex-shelter, to 3.1% and 0.9% respectively, in June.

In-turn, this is likely to have major medium-term ramifications for the Fed’s policy outlook, with increasing polit…