A.M. Notes

Research evidence excerpt

A.M. Notes

May 12, 2026

Economic Research

NORTH AMERICA — PRISCILLA THIAGAMOORTHY

Douglas Porter Chief Economist

U.S. equity futures are slightly lower this morning, while Treasury yields are edging up, douglas.porter@bmo.com (416) 359-4887

with the 10-year hovering near 4.3%. Oil prices continue to climb amid renewed Shelly Kaushik Senior Economist

concerns around the Iran war; Brent is up 3.5% to around $108 while WTI is 3.7% shelly.kaushik@bmo.com (416) 359-4407

higher to around $101. Priscilla Thiagamoorthy Senior Economist

April’s U.S. inflation data will be the main focus today, as investors look for clues on the priscilla.thiagamoorthy@bmo.com (416) 359-6229

timing of the Fed’s next move. Expectations are for the headline figure to stay hot amid Legal Entity: BMO Nesbitt Burns Inc.

higher gas and energy costs. As our ScottAnderson noted: “Weforecasta0.7%increase

intheCPI,onlyaslightmoderationfromthe0.9%jumpinMarch.Retailgasolineprices

increasedanother13%onaverageinApril,accordingtotheEnergyInformation

Administration,comparedtoa25%surgeinMarch.Meantime,theISMManufacturing

PricesPaidindexroseanother6pptsinAprilto84.6,itshighestlevelsinceApril2022

(anda26-pointjumpsincethebeginningoftheyear).Thecomparableservices

measurewasunchangedatanelevated70.7.Fromayearago,CPIinflationisexpected

toincreaseto3.8%inAprilfrom3.3%inMarchandabenign2.4%inFebruary.

TheFedwillbescanningforevidenceofinflationspreadingbeyondenergytogeneral

goodsandothersectorssuchastransportationandfoodandbeverages.Abigger-than-

expectedjumpinrent,services,orcoreinflationwouldbeseenasparticularly

menacing.CoreCPI,excludingfoodandenergy,isexpectedtoincreaseataslightly

elevated0.3%paceinApril,amodestuptickfromthe0.2%riseinMarch.Theyearly