US CPI outlook: Wells Fargo expects inflation to pick up

Wells Fargo said the U.S. CPI data would provide further evidence that higher tariffs are driving up prices. "It is still in the early stages of the price adjustment process, and it is unclear how higher import duties will ultimately be distributed among end point customers, domestic sellers, and foreign exporters," the bank wrote. "At the same time, growing consumer fatigue is making it more difficult to raise prices overall." Looking ahead, Wells Fargo expects inflation to pick up somewhat in the second half of the year, but not significantly, with core CPI and core PCE deflators returning to around 3% in the fourth quarter.