Inflation - Capital to Capitol

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Inflation

A collection of 3 posts

Inflation just had its biggest drop in 6 years. Oil is still rising. Both things are true and that is the whole problem.

CPI fell to 3.5%, blowing past estimates. All five major banks beat earnings. Goldman surged 9%. Warsh told Congress the inflation surge will be "a thing of the past." Then Trump walked back the 20% Hormuz toll. Markets ended the day trying to figure out which number to believe.

Trump just put a 20% toll on the world's most important shipping lane. That is not a negotiating tactic. That is a new cost of doing business.

Brent crude hit $83. The blockade restarts tomorrow at 4 PM. Markets priced a July Fed hike at 50% for the first time. Iran's new supreme leader has not been seen in public since his father's funeral ended. And tomorrow CPI, four bank earnings, and Warsh's testimony all land before noon.

Earnings Season

Delta absorbed the highest fuel bill in its history. It still beat earnings. That sentence tells you everything about where pricing power lives right now.

Delta beat estimates despite a $4.4 billion fuel quarter, raised full-year guidance, and hiked its dividend. The Fed released its monetary policy report. The Strait of Hormuz is still hot. And next Tuesday is the most important single day on the financial calendar since April.