Will year-on-year inflation exceed 3.4%?
Resolves YES if CPI-U is above 306.385 in the June 2023 release (to be released July 12th)
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I feel like you should specify "in the last year." Because you seem to be taking the June 2023 number and dividing it by the June 2022 number. But other inflation calculators might use monthly (June 2023 / May 2023) then raise to the power of 12.
May was 304.127. In order for this to resolve yes, the MoM inflation would need to be 0.742%, which is an annualized rate of 9.28%.
The reason the 12-month inflation is expected to drop so much, is that June of 2022 is rolling off. That month, the CPI-U went from 292.296 to 296.311, an increase for the month of 1.37%
Much inflation pessimism on this website!
Cleveland Fed Nowcast has 3.11% annualised for Q2. Do the maths on that and you get that it corresponds to a June YoY of 3.2%. And Cleveland Fed's track record is for missing to the upside by about 0.2 percentage points each month during recent disinflation.
On base effects alone you expect 3.4% YoY in June even if the next two months print at 0.4% each.
So the correct price for this market is definitely not more than 50%.
Seeing a bit of this in inflation and interest-rates related markets. Markets and expert forecasters are expecting inflation to come down at least a little bit, even just for boring mechanical reasons like base effects and CPI rents being laggy. Think you should have a good reason to disagree with them.