It’s inflation week in the US, where the BLS is expected to tell American households that consumer prices as measured by the broad, all-items gauge fell slightly in June from the prior month.

Consensus expects a marginal MoM decline for headline CPI, primarily attributable to relief on the energy gauge, which surged during the war.

If the headline index does in fact notch a MoM decline, it’d be the first since a fractional drop two years ago. The last time the all-items index notched a meaningful decline was April of 2020, when the economy was shuttered for the pandemic.

The core gauge is seen posting another 0.2% increase. Nothing to see there, apparently.

As a reminder no one needs, both headline and core price growth, whether proxied by CPI or PCE, are running well above the Fed’s target. That overshoot will come up on Tuesday and Wednesday, when Kevin Warsh will be back on Capitol Hill, this time to deliver his first congressional testimony as Fed chair.

In addition to persistently elevated inflation, Warsh will presumably be queried about his “task forces.” If Democrats have any sense about them (a debatable proposition), someone will press Warsh on whether his “expert” panels are an earnest effort to improve policymaking or just another excuse to “purify” a bureaucracy seen as insufficiently committed to the executive’s agenda.

Minutes from the June FOMC meeting, released last week, betrayed palpable inflation angst among Fed officials, the vast majority of whom are plainly reluctant to countenance the idea of rate cuts until there’s conclusive evidence that the purportedly “one-off” price effects of tariffs and supply shocks are in fact one-time events.

The figure above, from BMO’s Ian Lyngen, plots a Bloomberg index that uses natural-language processing to assess the tone (hawkish or dovish) of FOMC minutes, with the Fed funds rate.

“The June 2026 FOMC Minutes scored 13.78, the most hawkish score since the 15.2 print for the Minutes from the March 2022 FOMC Meeting when the Fed began raising rates to combat pandemic-era inflation,” Lyngen remarked. “Since the 1990s, it’s evident that the broader trends in FOMC Minutes sentiment have tended to provide an early signal on upcoming shifts to the trajectory of policy rates.”

The implication, Lyngen went on, is that the “next 2-3 meetings are ‘live’ for a rate hike.” I still find it difficult to imagine Warsh hiking rates this year unless Scott Bessent runs interference for him, where that means explaining to Trump that a small, “adjustment” hike now would forestall additional (and perhaps larger) hikes later.

In addition to CPI, macro watchers will get US retail sales data for June this week (consensus expects to hear nominal spending managed a small gain last month), PPI (seen cooling), builder sentiment (seen awful, as usual), pending home sales (seen flat for June), housing starts and the preliminary read on University of Michigan sentiment for July (seen at an abysmal 51).

Also worth watching: Activity data out of China, where retail sales are seen falling on a YoY basis for a second consecutive month.