The higher-frequency data are more concerning. CPI “increased 0.5 percent on a seasonally adjusted basis in May, after rising 0.6 percent in April” and 0.9 percent in March [1]. (0.3, 0.2, 0.3 percent for December, January, February, respectively.)

So a linear trend of 6% from March, closer to 9% if one extrapolates the March-April-May quarter. Almost all of that driven by food and energy. Core spiked to 0.4% MoM in April, but calmed down to 0.2% in May, on trend with pre-war numbers. It’s up 2.9% YoY, but trending a bit lower. (Looked at another way, we’ve already “booked” 2.5% of inflation for ‘26. If we continue at 0.5% MoM, we close the year +5.6%. Even if it drops to pre-war 0.2%, we’re still going to be +3.8%. Given the resumption of hostilities, I’m betting we’ll be closer to the former.)

Together with the jobs numbers, it would be weird for an independent Fed to not raise rates.

[1] https://www.bls.gov/news.release/cpi.nr0.htm

If you made 100k in say 2000 the equivalent would be 200k today. If you go by median house price your salary should have doubled since 2015!

See also the +25% inflation / -1.2% net wages after inflation over five years chart here, for those unfamiliar with how inflation % press releases are misleading over time. If household spending power is -1% after +4% inflation, then that inflation probably isn’t healthy for your country’s economic future, etc.

https://www.statista.com/chart/32428/inflation-and-wage-grow...

(I also suspect the wage index itself is disguising about the total wages paid index dropping like a stone, but haven’t done the math to chart it yet myself yet.)

every single day $5/gas is taking a BILLION dollars out of the economy that could have gone elsewhere

but it could be worse, we could be innocent civilian Iranians having the US bomb their water and power plants this week

Oil has only really maintained the ~$100/barrel price because of record SPR releases worldwide. Also, that $100 price is kinda fake because it's a future price. The spot prices got much higher. Well, that runway is coming to an end. If the Strait of Hormuz re-opened today , we'd still be facing an energy shock. Plus there's famine coming.

Now the US won't run out of oil or refined petroleum products. The uS is now a net exporter. But it's a global marekt so the prices are going to go way up. And some countries and heavily dependent on oil for electricity. They are going to face blackouts.

So even though fertilizer shortages are skewed towards the Global South, food prices too are global so they're going up too.

In 1973, the energy shock took ~6 months to manifest [1].

But I think the real problem is dynamic pricing. Inflation is insidious. People start raising prices on the expectation of rising prices, thus causing prices to rise. But so many industries now are going well beyond that by essentially colluding through AI tools (eg RealPage) to further raise prices.

I honestly don't know how this ends without a deep, long recession.

[1]: https://paulkrugman.substack.com/p/oil-crises-past-and-possi...

It serves the US Energy Dominance Agenda against China, Japan, India and the EU.

The Trump administration does not care about "its" population. There were already rumors early in the Trump term that Trump would not mind a recession so that his real estate cronies could buy cheap foreclosures.

So it is all a double win for the oligarchs. The stock market is still fine, nothing else matters.