US Economics: Inflation Weekly—Details of May data suggest further slowing in CPI

Research evidence excerpt

US Economics: Inflation Weekly—Details of May data suggest further slowing in CPI

US Economics

15 June 2026 Citi Research

May inflation data did not change our forecasts significantly, with both core CPI

and our latest estimate for core PCE closely in line with what we had been penciling

in before data were released. But details of the data do leave us more confident that

upcoming monthly inflation readings for both CPI and PCE will be softer.

Factors influencing our inflation assessment last week:

(↔) Core CPI rose a moderate 0.21%MoM in May, but with details of CPI and PPI

data leading to a strong 0.37% increase in core PCE in our forecast. This is equal to

what we were penciling in before May data was released. But if anything, a few key

details of May CPI leave us more confident that both core CPI and core PCE

monthly readings will be softer over the summer.

The key difference between softer core CPI and another month of strong core PCE

in May is rising portfolio management fees. These fees are calculated based on an

estimate of portfolio assets under management. When calculating these fees,

assets under management are held fixed throughout the reference month, based

on the level of AUM at the start of the month. But as assets under management will

change with asset prices, this component essentially reflects changes in asset

prices (mainly equities) from the start of one month to the start of the next.

The 4.8%MoM increase in portfolio management fees in May if anything was softer

than we were expecting given the rebound in equity prices from near the lows at the

start of April to near the highs at the start of May. This component will likely boost

core PCE again in June but so far should be much softer in July.

Figure 1.