US CPI/PPI - 2026-05-11

CPI was horrible, but it was expected to be. That said, at 0.6% for the month, headline came in far below last month's 0.9%. Core, on the other hand, grew 0.3% versus last month's .2%. For what it's worth, our favorite measure, core CPI ex OER, is now 2.37% year-on-year. The Fed's target for it is 2.5%. They key now is not these statistics, it is simply the reality of the war in Iran and its effect on oil prices -- and more important, the meta-reality of whether or not the Fed and other central banks have the smarts to "look through" this supply shock rather than mistaking it for canonical inflation.