- Annual headline CPI inflation rose 40 bps to 4.2% in May, with energy prices rising 23.5% over the past year. Annual core inflation rose 10 bps to 2.9%. Despite this spike, the 10 Year US Treasury note was little changed.
- The Federal Reserve is expected to hold rates steady for a fourth consecutive meeting in June. The current target range stands at 3.5–3.75%.
- US employers added an impressive 172K net new jobs in May, with three-month average job growth recovering to 188K.
- Annual wage growth fell 20 bps to 3.4% in May. Over the last three months, wages rose 2.8% (annualized), remaining well behind CPI.
- Consumer sentiment rose in June but remained near the record low amid the Iran conflict. Views of current conditions and future expectations both improved.
- Average 30-year mortgage rates rose to 6.5% in May. Existing home sales increased while new home sales fell.
* Latest data available.
After declining through 2023 and remaining subdued in 2024 and 2025, energy, gasoline, transportation, and airfare prices have surged in early 2026, with gasoline up over 40% in May and airline fares rising more than 25% year-over-year. The sharp re-acceleration mirrors the 2021–2022 inflation surge and reflects the passthrough of elevated oil prices, driven by the Iran conflict. Energy-related prices should fall assuming that the recently announced US-Iran agreement holds.
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