May Inflation May Be The Peak—If Oil Cooperates
An In-Line CPI, An 8% Run Rate, And A S&P 500 Leaning On 7,300
For informational and educational purposes only. Not investment advice. Not a recommendation.
By Michael Kramer, Mott Capital Management
Today’s tape:
May CPI · Inflation internals · June inflation / gasoline · Oil (Brent / WTI) · Gold / Dollar · USD/JPY (BOJ) · CTA flows · S&P 500 (7,300) · 1-day VIX · Central-bank week
The big picture:
“If oil hadn’t gone from $122 to $60, the Fed probably would have had a really hard time getting inflation back to 3% let alone 2%.”
Where we are:
The running question is whether re-accelerating inflation eventually puts the Fed in a box, with oil as the swing factor. We went into this print with the 1-day VIX pushing 20 and swaps a tick hotter than the Street — and May delivered no surprise, with the vol crush come and gone by the open. The weight now shifts to June, where falling gasoline prices argue for relief while the oil charts argue the pressure isn’t done.