A.M. Notes

Research evidence excerpt

A.M. Notes

May 19, 2026

Economic Research

NORTH AMERICA — PRISCILLA THIAGAMOORTHY

Douglas Porter Chief Economist

U.S. equity futures are lower this morning, while Treasury yields edged up, with the 10- douglas.porter@bmo.com (416) 359-4887

year at 4.6%. Oil prices remained elevated, despite some overnight easing after Jennifer Lee Senior Economist

President Trump said he’s holding off on Iran attacks. jennifer.lee@bmo.com (416) 359-4092

"TrumpSaysPlannedIranAttackOnHoldAfterGulfLeaders’Request:PresidentTrump Priscilla Thiagamoorthy Senior Economist

saidhewouldholdoffonaplannedU.S.attackonIranattherequestofGulfleadersto priscilla.thiagamoorthy@bmo.com (416) 359-6229

makeroomfornegotiationswithTehranoveraprospectivedealtoendthewar.” Wall Legal Entity: BMO Nesbitt Burns Inc.

Street Journal

Inflation concerns remain front and centre. Last week’s U.S. consumer inflation report

came in hotter than expected, reinforcing concerns that price pressures remain

persistent. We pushed back our Fed rate cut forecasts by three months… now expecting

a 25-bp cut in December and March.

Today, we’ll get Canada’s CPI report for April. As our BenjaminReitzes noted: “Energy

pricescontinuedtoclimbinApril,buildingonthepriormonth’ssurge,amidongoing

transportationdisruptionsduetothewarinIran.Thefederalgovernment’sfive-month

gasexcisetaxholidayprovidedlittlereprieve(thoughitonlystartedonthe20th).April

isaseasonallystrongmonthforCanadianCPIanyway,rising0.5%m/mormore(not

seasonallyadjusted)infourofthepastfiveyears.Indeed,beyondenergy,household

operations/furnishingsandhealth/personalcaretendtoseestronggainsinthemonth

aswell.There’salsopotentialupsiderisktoairfaresasairlinespassalonghigherfuel

costs.Onesectorthat’spullingtheotherwayishousing,restrainedbyfallinginterest