📝Higher Odds Of A Larger-Than-75bps Rate Hike From Fed: BMO

Consumer prices jumped 1.3% in June, surpassing even our above-consensus call (1.2%). This was the largest monthly increase since 2005, and it spiked the yearly rate to 9.1%, the highest since 1981. Rather than cooling down, inflation is heating up. While a pullback in gasoline costs in July and reported retail discounting will help tamp down the flames, the broad pressure in the core rate, led by plenty of inertia in rents, suggests inflation may not peak for a while, and might remain stubbornly high for longer than anticipated. The odds of a larger-than-75-bp Fed rate hike on July 27 just went up materially, sending Treasury markets tumbling and the yield curve inverting further.