INFINITESIMAL INFLATION

Inflationary pressures continued ebbing in May with the CPI unchanged (0.0%) M-o-M and up 3.3% Y-o-Y, down from 3.4% Y-o-Y in April. More importantly, core-CPI rose 0.2% M-o-M compared to 0.3% in April and 3.4% Y-o-Y, both the mildest gains since 2021. Critically, the May slowdown was broad-based and keeps the Fed on track for at least one 25bps cut in 2024 if inflation stays at this level through summer.