INFLATION IRRELEVANCE

Yesterday, May CPI and core CPI both came in at 0.1% M-o-M, and today headline and core producer price inflation (PPI) came in at 0.1% M-o-M, all below expectations. Better yet, trade services inflation, a proxy for wholesaler/retailer markups, remained unchanged since 12/24, and goods inflation, where tariffs should be hitting first, rose 0.2% M-0-M. So far, waiting for tariff inflation is waiting for Godot, but don’t prematurely celebrate.