Thoughts on today's inflation report. This report shows a sharp rise in inflation; the largest print since April 2023. Headline CPI rose 4.2% year over year (YOY) and 0.5% month over month (MOM) in May. But 60% of this monthly increase in total CPI was due to energy and specifically gasoline prices (which rose 7% MOM and 41% YOY). So the report is mainly showing a concentrated energy shock rather than a broad inflation across sectors. Overall, the report is not good news at the headline level, but the underlying details are less alarming because the inflation pressure is concentrated in energy rather than broad-based across the full consumer basket. This also means as long as the Iran war goes on and energy is under pressure inflation will remain an issue. Specifically for the fed and interest rates, the headline number is too high to justify a dovish pivot, especially with inflation now above 4%. But the softer core monthly reading gives the Fed some reason not to overreact immediately. At the very least this report crushes any rate cut hopes.(Sina 🗝️⚡ BI Report)