June 12, 2026
Inflation
The Consumer Price Index (CPI) rose 0.5% in May. The core CPI, excluding food and energy, rose 0.2%. Year-over-year, consumer prices are up 4.2% while core CPI has risen 2.9%. Producer prices (PPI) were up 1.1% in May and are up 6.5% over the last 12 months.
Our Take: May inflation data was slightly mixed, with PPI coming in hotter than expected, despite a more moderate core CPI print. The latest data is likely to support the Federal Open Market Committee’s (FOMC) continued cautious approach, as persistent inflationary pressures may keep policymakers focused on returning inflation closer to target.
Iran
The U.S. and Iran traded fire on several occasions, and the intensity of these exchanges increased following the downing of a U.S. attack helicopter over the Strait of Hormuz. President Trump ordered strikes against Iran due to slow progress in negotiations, but then called off these strikes on Thursday due to progress in negotiations. Iranian Foreign Minister Araghchi stated on Friday that a Memorandum of Understanding “has never been closer”. Crude prices fell on optimism that the Strait of Hormuz will reopen soon.
Our Take: Energy markets are signaling renewed optimism around a deal that will reopen the Strait and begin negotiations around Iran’s nuclear program.