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May CPI is hot – but we dodged a bullet… the labor market handbrake is releasing… what a hike would mean for AI stocks… an edge for a bifurcated stock market
The May Consumer Price Index (CPI) report came out this morning, and the initial read is about as good as investors could have hoped for given the circumstances.
Headline inflation came in at 4.2% year-over-year, matching expectations. Yes, that’s the highest print since April 2023, and yes, it crossed the 4% threshold for the first time in three years. But the monthly pace actually slowed – 0.5% in May versus 0.6% in April.
Meanwhile, the number that matters most to the Fed – core CPI, which strips out volatile food and energy – came in at just 0.2% month-over-month, cooler than both the 0.3% forecast and April’s 0.4% reading.
