July 17, 2026
Inflation
The Consumer Price Index (CPI) fell 0.4% in June. The core CPI, excluding food and energy, was unchanged at 0.0%. Year-over-year, consumer prices are up 3.5% while core CPI has risen 2.6%. Producer prices (PPI) were down 0.3% in June and are up 5.5% over the last 12 months.
Our Take: June inflation data showed a positive turnaround from previous months, with easing headline and core inflation readings providing encouraging signs that price pressures may be moderating. While the improvement is a step in the right direction, inflation remains above the Fed’s 2% target, reinforcing the Federal Open Market Committee’s (FOMC) cautious data-dependent approach.
Iran
Iran continued its attacks on shipping through the Strait of Hormuz and declared the strait closed in response to the renewed U.S. blockade on Iranian ports. The U.S. has increased air attacks on Iran and threatened to further attack Iranian infrastructure until the strait is opened. Iran has responded with attacks on U.S. military facilities in the region and has threatened to attack its neighbors civilian and energy infrastructure if the U.S. expands its attacks. Traffic through the strait has continued to dwindle, and crude prices have climbed back up to near their level prior to the Memorandum of Understanding.
Our Take: The U.S. and Iran are currently in an escalation spiral as Iran seeks to defend its control of the Strait of Hormuz and the U.S. seeks to get Iran to give up that control. In the meantime, traffic flows through the strait are likely to remain reduced, and crude and other commodity prices will see upward pressure as markets price in a longer period of supply disruption.
Retail Sales
June retail sales rose 0.2% from May, which was an expected slowdown due to declining gas prices in the month. Ex autos and gas, retail sales remained strong at 0.4% growth from May, even as core inflation appeared to moderate in June.
Our Take: When adjusting for the impact of falling gas prices, U.S. consumer spending is proving to be resilient. This report further indicates that elevated energy prices are not yet having a significant impact on growth in the U.S.