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“The word 'dog' comes up a lot. Well, I was a wolf, OK? I used to eat dogs.” ~ Jerry West (May 28, 1938 - June 12, 2024)

Good evening,

“Inflation is falling like a rock.” Fundstrat Head of Research Tom Lee has been pointing this out for quite some time, and the truth of that repeated assertion was even more evident in the macroeconomic data released this week. May Core CPI came in at +0.16% MoM, significantly lower than consensus expectations of +0.28%, and half of what we saw for this figure in April. On Thursday, May Core PPI came in at zero, versus Street forecasts of +0.26%.

“This week’s data shows that inflation’s trajectory in May cooled at a faster pace than the stepdown seen in April,” Lee wrote, “and it sort of argues that the relatively ‘hot’ inflation figures we saw from January to March were anomalous.” He and his team found even more encouraging news in the internals of CPI data. Super Core CPI (Core CPI excluding housing) came in negative for the first time since September 2021.