There was more incrementally good news on the inflation front Monday in the US, when a key gauge of used vehicle prices posted the largest monthly decline since the onset of the pandemic.

The used car market remains a key piece of the disinflation puzzle for the Fed, although investors’ waning interest in the trajectory of prices is perhaps indicative of the extent to which this isn’t necessarily mission critical anymore.

The Manheim gauge receded 4.2% in June from May, an outsized decline that counted among the most pronounced in the history of the series. It was the third consecutive drop.

“The YoY decline was also large [but] auction prices were lower in the fall last year, and we expect these YoY moves to shrink in the months ahead as the market normalizes,” Chris Frey, senior manager of economic and industry insights for Cox Automotive, said Monday.

I won’t spend an inordinate amount of time on this. Bottom line: The related measures in the official inflation series tend to respond on a lag to wholesale prices, so the declines on the Manheim gauge are noteworthy from a “disinflation stars aligning” perspective, assuming shelter prices moderate as promised.

Concerns around another rates shock weighed on equities last week, and Fed officials continued to beat the hawkish drum on Monday. Loretta Mester said rates probably aren’t all that restrictive just yet, Mary Daly said a “couple” of additional hikes are probably necessary to bring down inflation and Michael Barr reiterated there’s more work to do.