US: Macro Since March FOMC - Inflation: Soft Data One Area Of Hope (3/3)

* If there have been any welcoming signs on the recent inflation front for the
Fed, it's in soft data.
* The April preliminary PMIs showed service providers reporting the

  second-lowest overall cost increase for three-and-a-half years and slower
  charge inflation across both manufacturing and service sectors.

* It built on the Fed's Beige Book last week noting "another frequent comment

  was that firms' ability to pass cost increases on to consumers had weakened
  considerably in recent months, resulting in smaller profit margins" whilst
  the March ISM Services release saw a surprise slide in prices paid to 53.4
  from 58.6 for its lowest since the pandemic.

* However, the stubborn persistence in the hard data suggests the burden of
proof is now to the downside, with likely multiple lower inflation readings
and a higher unemployment rate needed to entertain near-term rate cuts.