US CPI/PPI - 2024-06-11

Couldn't ask for a cleaner confirmation of our thesis for ongoing disinflation. The top five irreducible categories, making up 38% of index weight, contributed 18 bp to a headline inflation number that printed at 7 bp, therefore more than explaining the whole thing. The inescapable conclusion is that the other 62% of the basked must have been in outright deflation in May. Not clear this will change any thinking at the Fed, but it might help that December dot we'll see later today show two rate cuts, not one.