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(Bloomberg) — Inflation in the US likely continued to soften in June but a key measure of underlying price pressures is still running at an uncomfortable pace that keeps the Federal Reserve tilted toward resuming interest-rate hikes this month.

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A government report Wednesday is forecast to show the consumer price index climbed 3.1% from a year ago, the smallest advance since March 2021, largely due to lower prices at the gasoline pump. Such a result would leave the headline CPI measure down almost 2 percentage points in just two months.

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However, once volatile energy and food costs are stripped out, core CPI is seen rising 5% from a year ago. While that would be the smallest annual increase since late 2021, it’s still more than double the Fed’s goal, based on a different inflation metric.

The June inflation readout follows a number of recent reports that underscore a resilient economy, despite 5 percentage points worth of interest-rate hikes over the past year. Friday’s jobs report showed a healthy, albeit smaller-than-expected, increase in payrolls as well as firmer wage growth.

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Fed officials due to speak in the coming week include Neel Kashkari, Christopher Waller, Loretta Mester and Mary Daly. Investors will parse their comments for clues about their appetite for resuming rate hikes. The Fed’s Beige Book will be released on Wednesday as well.

What Bloomberg Economics Says:

“Fed speakers have telegraphed their intention to raise rates by another 25 basis points at their July meeting, so attention should be focused on how the balance of risks is evolving, and what that will mean for the Fed going forward.” 

—Stuart Paul, Eliza Winger and Jonathan Church, economists. For full analysis, click here

Other US economic reports in the coming week include the June producer price index and the University of Michigan’s preliminary July consumer sentiment index.

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Turning north, the Bank of Canada sets rates and unveils new economic forecasts on Wednesday. Governor Tiff Macklem has got plenty of reason to hike again, after upending markets with a 25 basis-point increase last month. Growth is coming in stronger than forecast, inflation is proving stubborn and the housing market is rebounding — in part because of Macklem’s rate pause.

Elsewhere, Chinese data will reveal if inflation stayed positive there, UK wage data will show how inflationary wage pressures are, and among several central bank decisions, officials in New Zealand and South Korea may keep rates unchanged. Group of 20 finance chiefs will fly to India for meetings at the weekend.  

Click here for what happened last week and below is our wrap of what’s coming up in the global economy.

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Asia

China’s inflation reading due out Monday is expected to hold at 0.2%, though deflationary risks continue to mount. 

The world’s second-largest economy will also report on June trade data on Thursday, with investors expecting exports to have fallen further as concerns over the recovery path build. 

The Reserve Bank of New Zealand is set to hold policy on Wednesday, having called time on its hiking cycle, while Reserve Bank of Australia Governor Philip Lowe will speak after the recent decision to keep policy unchanged there. 

The Bank of Korea is also expected to hold rates steady on Thursday, while still cautioning that price growth remains above its 2% target. 

The Philippines will release trade figures the same day. Singapore’s initial second quarter gross domestic product data is forecast to show an improvement from anemic figures in the first three months of the year. 

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India’s trade figures are due out Friday, following inflation data earlier in the week. 

The spotlight will remain on India at the weekend as Group of 20 finance ministers and central bank governors meet in Gandhinagar, where they’re likely to discuss the state of the global economy and debt relief amid division over Russia’s invasion of Ukraine.

Europe, Middle East, Africa

The UK will take center stage at a time when bets on Bank of England interest rates have surged to the highest level in a quarter century. 

Any financial stability implications of such speculation may feature in the latest assessment of system risks and stress tests by the central bank, to be released on Wednesday, along with a press conference by Governor Andrew Bailey. The governor will also deliver a speech on Monday. 

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Data showing the strength of wages and the labor market on Tuesday will also guide investors in gauging UK inflation. GDP numbers for May will be released a couple of days later. 

In the euro zone, the European Central Bank on Thursday will release an account of the deliberations behind its June 15 decision, possibly shedding further light on policymakers’ views of inflation risks and the outlook for rates. Public remarks by officials will also draw attention, including chief economist Philip Lane on Wednesday. 

It’s not a big week for data in the region, though monthly euro-area industrial production numbers on may help signal whether the economy has shaken off its recent recession.

The Nordics, where central banks remain fully committed to tightening, will see plenty of economic news. Sweden’s Riksbank will release minutes of its June 29 decision to raise rates again and signal more action, and national housing data will be published the same day. 

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Meanwhile, inflation data will be published in Norway and Denmark on Monday and Sweden on Friday, all of which will inform officials on how alarmed they need to be about consumer prices. 

Russian data on Tuesday will likely show if the current-account surplus shrank further in the second quarter after a prior slump of more than $51 billion compared with a year earlier, driven by international sanctions.

Among rate decisions in the wider region: 

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Around the African continent, consumer-price data will be in focus. Inflation in Egypt due Monday, probably accelerated to 35% last month from 32.7% in May. 

Later in the week, Nigeria’s measure is expected to have surged to about 30% from 22.4%, fueled by the recent scrapping of fuel subsidies and the sharp depreciation of the naira.

Latin America

Much-watched central bank surveys of economists and traders in Brazil and Chile get the week rolling.

Consumer price data out of Colombia should show inflation slowed for a third month in June, though the pace of disinflation has so far been modest and core readings had yet to peak through May.

Analysts surveyed by Bloomberg see consumer price increases there easing to 9.5% by year-end, with Banco de la República beginning to cut interest rates in the fourth quarter.

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In Argentina, the June consumer prices report may show pressures moderated at the margins, with the monthly figure slowing from May’s 7.8% result to leave the annual figure short of 120%. The readings may persuade the central bank to keep the key interest rate at 97% this week.

Disinflation in Peru is gathering pace but the central bank is highly unlikely to begin cutting the key rate from the current 7.75% in the coming week. 

In Brazil, the June consumer price print is expected to fall below the central bank’s 3.25% target.

If the data come in as expected, Banco Central do Brasil, led by Roberto Campos Neto, will go into its Aug. 1-2 meeting with some room for maneuver while also facing considerable political pressures to go big.

—With assistance from Monique Vanek, Robert Jameson, Stephen Wicary and Paul Jackson.

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