08:53 AM EDT, 07/11/2024 (MT Newswires) -- "Turn up the music, because the Fed's pivot party looks like it's about to officially get started after today's soft June CPI print," according to CIBC Economics on Thursday.

CIBC noted Core CPI prices rose 0.1% m/m in June, one tick below consensus expectations, and likely consistent with core PCE inflation below target in the month. Headline inflation also came below expectations, with prices falling by 0.1% whereas forecasters were expecting a 0.1% gain. In year-over-year terms, headline inflation came down three notches to 3.0%, and core was down one tick to 3.3%.

The soft reading, CIBC said, was mainly due to services prices weakening again. Most notably, shelter inflation edged down materially ("a possible sign of more to come") and non-housing services inflation was weighed down again by transportation services. Core goods prices contracted slightly in the month.

In three-month annualized terms, CIBC noted, core CPI inflation moved down sharply to 2.1% in June from 3.3% the month prior and the six-month annualized rate moved down four notches to 3.3%, measures that the Fed is likely putting more weight on given the noise in monthly readings. CIBC said: "That is a material resumption of progress and makes the Q1 flair up in price pressures feel like a distant memory. When combined with growing downside risks to the labor market that are top of mind for Powell, today's data removes almost all doubt that the Fed will start the easing cycle this year. We continue to expect the Fed will cut twice this year, starting in September."