US July CPI report: Core inflation reaches its highest level since 2008

Key points: US c onsumer prices rose in line with expectations in July: +0.2% M/M for total CPI and core CPI . Inflation remained stable at 2.9% and core inflation gained 0.1pt to 2.4% , its highest level in a decade . In short, even though core inflation printed above expectations , today’s number is not a game changer and we should not expect a break in the trend . T he bulk of base effects is now behind us , wage growth remains muted and oil prices are projected to be more or less stable this quarter and next . We therefore forecast inflation to remain contained in the second part of 2018 .