CPI Commentary

May CPI report confirmed that the Iran War’s energy shock has pushed headline inflation back above 4%, while the underlying core details were somewhat less concerning than the headline figure suggests.  Headline CPI rose 0.5% m/m and 4.3% y/y, up from 3.8% in April and the highest annual pace since April 2023. 

The April CPI report saw an expansion of the Iran War’s energy shock into broader goods categories and firmly set the headline CPI on its way to reach 4.0% in the second half of the year.  Headline CPI rose 0.6% m/m and 3.8% y/y in April, up from 3.3% in March, the highest annual pace since May 2023.

Headline CPI rose 0.9% m/m and 3.3% y/y in March, driven primarily by an energy shock tied to the Iran conflict.  Core CPI, however, increased just 0.2% m/m and 2.6% y/y, indicating that underlying inflation pressures remained relatively contained despite the surge in gasoline prices.

Headline CPI rose 0.3% m/m and 2.4% y/y in February, while core CPI increased 0.2% m/m and 2.5% y/y.

Headline CPI rose 0.2% m/m (vs. 0.3% expected) and 2.4% y/y (vs. 2.5% expected) in January, marking the lowest annual rate since May 2025. Core CPI increased 0.3% m/m, in line with expectations, while holding at 2.5% y/y.

Headline CPI rose 0.3% m/m in December, while core CPI increased 0.2% m/m, each printing 10bps below consensus expectations. The December report helps clarify prior data distortions stemming from last fall’s government shutdown and provides a cleaner signal that inflation pressures continued to ease as 2025 drew to a close.