Fed speakers not concerned about inflation, for now - Nomura

Analysts at Nomura explained that it was of interest how the two Governors speaking last week addressed the recent soft inflation data. 

Key Quotes:

"For instance, Governor Brainard said, “Although the past two monthly readings of core inflation have been held down in part by idiosyncratic factors, including upgrades to cellphone plans, the apparent lack of progress in moving core inflation back to 2 percent is a source of concern.” 

"By contrast, Governor Powell did not show as much concern about the recent inflation data or about downside risks to the inflation forecast. The next CPI report is scheduled for the morning of the second day of the June FOMC meeting and will likely have no bearing on the monetary policy decisions, but could prove very important for the decisions to be made this fall."

"Note that the decline of the unemployment rate to 4.3% in May is a potent reminder that spare capacity continues to decline."