---
title: "US Inflation & the Fed"
slug: us-inflation-fed
type: data-index
sector: finance
canonical_url: https://deepstoryresearch.com/data/us-inflation-fed
series: [cpi_path, cpi_category, cpi_turn, core_pce_outlook, fed_funds, rates_now]
series_count: 6
data_point_count: 23
data_as_of: 2026-06
source_quality: curated_snapshot
tier: free
generated_at: 2026-08-11
---

# US Inflation & the Fed
_CPI path, category drivers, the core PCE turn & the Fed's response_

> Deepstory Research context file · **Free tier** · <https://deepstoryresearch.com/data/us-inflation-fed>
> Self-contained AI briefing. Drop into an LLM window or RAG pipeline.

## AI research use contract

- Treat this file as source-grounded context, not a live database. Quote `source_ref` and `data_as_of` when using numbers.
- Separate `FACT`, `ESTIMATE`, `FORECAST`, `TARGET`, and `INFERENCE`. If a row basis is unclear, say it is unclear.
- Prefer T1/T2 sources for hard facts; use T3/T4 sources as context that should be checked before money, legal, medical, operational, or policy decisions.
- Keep answer structure clean: first say what the data says, then what you infer, then what would change the conclusion.

## Research upgrade checklist

- Separate CPI, core CPI, PCE, and core PCE explicitly — they are different gauges, and the divergence between them is the story here rather than a rounding difference.
- Add the energy pass-through chain (crude → pump → airfares → shelter) so the Hormuz shock is traceable rather than asserted.
- Mark every forecast with its forecaster, publication date, and horizon; the 2.9% → 3.4% core PCE revision is only meaningful with both dates attached.
- Add real (inflation-adjusted) fed funds alongside the nominal path, since the real rate is what transmits to mortgages, gold, and capex hurdles.
- Track FOMC dissents and dot-plot dispersion, not just the headline decision, to show how contested the plateau is.

## TL;DR — index summary

US headline CPI ran the wrong way through 2026 — 3.3% in March to a 4.2% May peak — and the driver is narrow: energy at +23.5% YoY after the Strait of Hormuz closure, against shelter at +3.4%. The Fed's answer was a fourth consecutive hold at a 3.75% upper bound, while forecasters moved the other way and lifted the year-end core PCE outlook from 2.9% to 3.4%. The tension between a headline that turns down and a core outlook that keeps rising is the whole index.

## What this index covers

Six series telling one connected macro story: the 2026 CPI path (headline vs core), the May 2026 breakdown by category, the headline's mid-year turn, the year-end core PCE outlook before and after revision, the fed funds path from 2021, and a snapshot of current benchmark rates.

**Series in this index:**

- `cpi_path` — Headline and core CPI, year-over-year, by month.
- `cpi_category` — Year-over-year price change by CPI category.
- `cpi_turn` — Headline CPI through the spring peak into the June cooldown.
- `core_pce_outlook` — Year-end 2026 core PCE outlook, prior vs revised.
- `fed_funds` — The FOMC target rate by year.
- `rates_now` — The current policy rate next to Treasury and mortgage rates.

**Entities tracked:** Federal Reserve / FOMC (Chair Kevin Warsh); BLS (CPI); BEA (PCE); J.P. Morgan (outlook); the 10-year Treasury; the 30-year fixed mortgage.

## Key findings

- Headline CPI climbed 3.3% (Mar) → 3.8% (Apr) → 4.2% (May 2026) before turning (cnbc-cpi-mar / cnbc-cpi-apr / marketplace-june-cpi).
- Energy ran +23.5% YoY in May 2026 against a 4.2% all-items print — the inflation is concentrated, not broad (cnbc-cpi-may).
- Shelter, over a third of the CPI basket, rose only 3.4% — the weightiest category is not what is driving the number (cnbc-cpi-may).
- Year-end core PCE outlook was raised 2.9% → 3.4% on the Hormuz oil, gas, fertilizer and helium supply shock (jpm-outlook).
- Fed funds ~0.125% (2021) → 3.75% upper bound after the June 2026 hold, the fourth consecutive hold (fomc / fed-jun2026).
- The rates-now snapshot stacks 3.75% policy, 4.45% 10-year Treasury, 6.53% 30-year mortgage (fed-jun2026 / mnd-treasury / bankrate-mortgage).

## Evidence basis map

The free tables above show `source_ref` but not the row-level `value_basis`. This section mirrors the visible rows only, so AI tools can separate observed values from estimates, forecasts, targets, and derived values.

| series | row | source_ref | value_basis |
| --- | --- | --- | --- |
| cpi_path | month=Feb 2026; headline=2.4 | cnbc-cpi-mar | Feb 2026 headline CPI 2.4% YoY (per March report comparison) |
| cpi_path | month=Mar 2026; headline=3.3; core=2.6 | cnbc-cpi-mar | Mar 2026 CPI +3.3% headline, +2.6% core YoY |
| cpi_path | month=Apr 2026; headline=3.8; core=2.8 | cnbc-cpi-apr | Apr 2026 CPI +3.8% headline, +2.8% core YoY |
| cpi_path | month=May 2026; headline=4.2; core=2.9 | cnbc-cpi-may | May 2026 CPI +4.2% headline (highest since Apr 2023), +2.9% core YoY |
| cpi_category | label=Energy; pct=23.5 | cnbc-cpi-may | May 2026: energy +23.5% YoY (the inflation driver) |
| cpi_category | label=All items (headline); pct=4.2 | cnbc-cpi-may | May 2026: all items +4.2% YoY |
| cpi_category | label=Shelter; pct=3.4 | cnbc-cpi-may | May 2026: shelter +3.4% YoY (>1/3 of CPI weight) |
| cpi_category | label=Core (ex food & energy); pct=2.9 | cnbc-cpi-may | May 2026: core +2.9% YoY |
| cpi_turn | month=Mar 2026; headline=3.3 | bls-cpi | March 2026 CPI +3.3% YoY |
| cpi_turn | month=Apr 2026; headline=3.8 | bls-cpi | April 2026 CPI +3.8% YoY |
| cpi_turn | month=May 2026; headline=4.2 | marketplace-june-cpi | May 2026 CPI +4.2% YoY (spring peak) |
| cpi_turn | month=Jun 2026; headline=3.5 | marketplace-june-cpi | June 2026 CPI eased to 3.5% YoY from 4.2% in May |
| core_pce_outlook | label=Core PCE outlook (prior); pct=2.9 | jpm-outlook | Prior year-end 2026 core PCE outlook ~2.9% |
| core_pce_outlook | label=Core PCE outlook (revised); pct=3.4 | jpm-outlook | Year-end 2026 core PCE outlook raised to 3.4% on Strait of Hormuz oil, gas, fertilizer and helium supply shock |
| fed_funds | year=2021; pct=0.125 | fomc | Target range 0–0.25% (near zero) through 2021 |
| fed_funds | year=2022; pct=4.375 | fomc | Seven hikes in 2022 lifted the range to 4.25–4.50% by year-end |
| fed_funds | year=2023; pct=5.375 | fomc | Range reached 5.25–5.50% in July 2023 — a 23-year high |
| fed_funds | year=2024; pct=4.375 | fomc | Three cuts in late 2024 brought the range to 4.25–4.50% |
| fed_funds | year=2025; pct=3.625 | fed-jun2026 | Further cuts in 2025 set the 3.50–3.75% range held into 2026 |
| rates_now | label=Fed funds (upper bound); pct=3.75 | fed-jun2026 | Target range upper bound 3.75% after June 2026 hold |
| rates_now | label=10-yr Treasury; pct=4.45 | mnd-treasury | 10-year Treasury yield 4.45% on Jun 17 2026 |
| rates_now | label=30-yr fixed mortgage; pct=6.53 | bankrate-mortgage | 30-year fixed mortgage averaged 6.53% on Jun 22 2026 |

## The series (per-chart briefings)

### The 2026 CPI path — line
**Direct answer:** Headline and core CPI, year-over-year, by month.
**Time bracket:** monthly (2026)

| month | headline | core | source_ref |
| --- | --- | --- | --- |
| Feb 2026 | 2.4 |  | cnbc-cpi-mar |
| Mar 2026 | 3.3 | 2.6 | cnbc-cpi-mar |
| Apr 2026 | 3.8 | 2.8 | cnbc-cpi-apr |
| May 2026 | 4.2 | 2.9 | cnbc-cpi-may |

**Read:** Headline runs well above core — the gap is the energy shock.

### May 2026 CPI by category — bar
**Direct answer:** Year-over-year price change by CPI category.
**Time bracket:** snapshot (May 2026)

| label | pct | source_ref |
| --- | --- | --- |
| Energy | 23.5 | cnbc-cpi-may |
| All items (headline) | 4.2 | cnbc-cpi-may |
| Shelter | 3.4 | cnbc-cpi-may |
| Core (ex food & energy) | 2.9 | cnbc-cpi-may |

**Read:** One category — energy — is doing nearly all the work.

### The mid-year turn — line
**Direct answer:** Headline CPI through the spring peak into the June cooldown.
**Time bracket:** monthly (2026)

| month | headline | source_ref |
| --- | --- | --- |
| Mar 2026 | 3.3 | bls-cpi |
| Apr 2026 | 3.8 | bls-cpi |
| May 2026 | 4.2 | marketplace-june-cpi |
| Jun 2026 | 3.5 | marketplace-june-cpi |

**Read:** The peak is in, but a peak is not a return to target.

### Core PCE outlook, revised — bar
**Direct answer:** Year-end 2026 core PCE outlook, prior vs revised.
**Time bracket:** forecast

| label | pct | source_ref |
| --- | --- | --- |
| Core PCE outlook (prior) | 2.9 | jpm-outlook |
| Core PCE outlook (revised) | 3.4 | jpm-outlook |

**Read:** Forecasters raised core even as headline turned down.
**Caveat:** Both bars are forecasts, not prints — and the Fed targets PCE, not CPI.

### Fed funds rate path — line
**Direct answer:** The FOMC target rate by year.
**Time bracket:** annual (policy prints)

| year | pct | source_ref |
| --- | --- | --- |
| 2021 | 0.125 | fomc |
| 2022 | 4.375 | fomc |
| 2023 | 5.375 | fomc |
| 2024 | 4.375 | fomc |
| 2025 | 3.625 | fed-jun2026 |

_+1 more row on the live page and in the full working dataset._

**Read:** Near-zero to restrictive, then a 2026 plateau.

### Rates now — bar
**Direct answer:** The current policy rate next to Treasury and mortgage rates.
**Time bracket:** snapshot (Jun 2026)

| label | pct | source_ref |
| --- | --- | --- |
| Fed funds (upper bound) | 3.75 | fed-jun2026 |
| 10-yr Treasury | 4.45 | mnd-treasury |
| 30-yr fixed mortgage | 6.53 | bankrate-mortgage |

**Read:** The spread stack households and markets actually pay above policy.

## Cross-series synthesis — why this matters

Read cpi_category as the explanation for cpi_path: a 4.2% headline built on +23.5% energy and +3.4% shelter is a supply shock wearing an inflation costume. That distinction is what justifies holding rather than hiking — rate policy does not reopen a strait.

The most important relationship on the page is cpi_turn against core_pce_outlook, because they point in opposite directions. Headline peaked in May and cooled; the year-end core PCE outlook was simultaneously raised from 2.9% to 3.4%. Anyone reading only the headline turn concludes the problem is solving itself; anyone reading only the revision concludes it is worsening. Both are true of different gauges, and only one of them is what the Fed targets.

fed_funds and rates_now are the transmission layer to the rest of the site: the 3.75% plateau sets the floor under the 4.45% 10-year, which sets the floor under the 6.53% mortgage in housing-affordability-2026, while the real level of that rate is the opportunity-cost input to gold-price. The energy driver traces straight back to us-oil-gas.

## Entities & relationships

| Entity | What they do | Key stat | Relationship |
| --- | --- | --- | --- |
| Federal Reserve / FOMC | Sets the policy rate | 3.75% upper bound, fourth consecutive hold (Jun 2026) | Anchors Treasuries, mortgages, gold opportunity cost |
| Kevin Warsh | Fed Chair through the 2026 holds | Presided over the June 2026 hold at 3.50–3.75% | Owns the "hold through a supply shock" call |
| BLS | Publishes the CPI | Source for the 2026 monthly path | Primary for cpi_path, cpi_category and cpi_turn |
| BEA | Publishes the PCE price index | The gauge the Fed actually targets | Underlies the core PCE outlook series |
| J.P. Morgan | Sell-side forecaster | Raised year-end core PCE 2.9% → 3.4% | Provides the forward comparator |
| 30-yr fixed mortgage | Household borrowing cost | 6.53% (Jun 22 2026) | Spread over the 10-yr Treasury; drives housing-affordability-2026 |

## Timeline of key events & decisions

- **2021** — Target held near zero (0–0.25%) → the base of the tightening cycle
- **2022–2023** — Rapid hiking cycle to a 23-year high (5.25–5.50%) → the move that reset mortgages, Treasuries and gold's backdrop
- **2026-02-28** — Military action leads to the de facto closure of the Strait of Hormuz → the supply shock that surfaces as +23.5% energy in the May CPI
- **2026-05** — Headline CPI peaks at 4.2% YoY → the top of the 2026 re-acceleration
- **2026-06** — FOMC holds at a 3.75% upper bound for the fourth time → the plateau every rate-sensitive index keys off
- **2026-06** — Year-end core PCE outlook revised 2.9% → 3.4% → forecasters move up while the headline moves down

## Cross-industry ripple

- **Housing:** The 3.75% plateau holds the 30-year mortgage at 6.53%, keeping the affordability squeeze in housing-affordability-2026 in place.
- **Energy:** The CPI energy line is the consumer-side print of the Hormuz disruption tracked in us-oil-gas.
- **Precious metals:** A plateau in nominal rates against a rising core outlook compresses real rates, which historically supports gold (gold-price). _(inference)_
- **Corporate finance:** A 3.75% plateau resets refinancing and capex hurdle rates — relevant to the AI buildout in ai-capex-vs-defense. _(inference)_

## Non-obvious reads (interpretation)

_This section is interpretation, not sourced fact — each item names the observation it is built on and a confidence level._

- **Observation:** Shelter is over a third of the CPI basket but rose only 3.4%, while energy at a far smaller weight rose 23.5%.
  **Read:** 2026 inflation is narrow and supply-driven rather than broad and demand-driven, which is the strongest available argument that holding — not hiking — was the correct policy response. _(confidence: medium)_
- **Observation:** Headline CPI turned down in June while the year-end core PCE outlook was revised up.
  **Read:** The turn is more likely an energy base effect than genuine disinflation. If so, the headline improvement fades out of the year-over-year comparison while the core problem persists — meaning cuts priced off the headline turn would be priced off the wrong series. _(confidence: medium)_
- **Observation:** The Fed held four consecutive times through an accelerating headline print.
  **Read:** The committee is treating the Hormuz shock as transitory in the strict sense — a level shift it cannot reverse with rates. That is a defensible read, and it is also precisely the call that went wrong in 2021. _(confidence: low)_

## Glossary / key terms

- **CPI** — Consumer Price Index (BLS) — the headline inflation gauge quoted in press coverage.
- **PCE** — Personal Consumption Expenditures price index (BEA) — the gauge the Fed actually targets. It typically runs below CPI.
- **Core** — The index excluding food and energy, used to see the underlying trend through volatile inputs.
- **Fed funds rate** — The FOMC's target for overnight interbank lending — the base policy rate.
- **Upper bound** — The top of the target range (3.75% of a 3.50–3.75% range).
- **Hold** — An FOMC meeting that leaves the target unchanged.
- **Base effect** — A change in a year-over-year rate caused by the comparison month a year earlier rather than by current prices.
- **Term premium** — Extra yield investors demand to hold longer-dated Treasuries.

## How to use this with AI

Paste this file into an LLM context window (or a RAG store) and ask cross-series questions. The tables carry a `source_ref` per row; the source registry below maps each ref to a named source and a trust tier.

### Suggested prompts (multi-series)

```text
Using cpi_category and cpi_path, quantify how much of the 4.2% May 2026 headline is attributable to energy, and state what the headline would look like with energy at its 2025 rate.
```

```text
cpi_turn falls while core_pce_outlook rises. Explain how both can be correct, name which gauge the Fed targets, and say which one should drive a rate decision.
```

```text
Using fed_funds and rates_now, trace the 3.75% policy rate through to the 6.53% mortgage, and cross-reference housing-affordability-2026.
```

```text
Build the "higher for longer" and "cuts coming" cases from these six series, naming which series each side has to ignore.
```

```text
Relate this index to us-oil-gas: show the pass-through from the Strait of Hormuz closure to the CPI energy line and the core PCE revision.
```

## Sources & trust

| ref | source | trust tier | url |
| --- | --- | --- | --- |
| bls-cpi | US Bureau of Labor Statistics — Consumer Price Index | T1 · Government / regulator / central bank | https://www.bls.gov/cpi/ |
| cnbc-cpi-mar | CNBC — CPI inflation report, March 2026 (+3.3%) | T3 · Reputable press / research org / OWID | https://www.cnbc.com/2026/04/10/cpi-inflation-report-march-2026.html |
| cnbc-cpi-apr | CNBC — CPI inflation, April 2026 (+3.8%) | T3 · Reputable press / research org / OWID | https://www.cnbc.com/2026/05/12/cpi-inflation-april-2026-.html |
| cnbc-cpi-may | CNBC — CPI inflation report, May 2026 (+4.2%) | T3 · Reputable press / research org / OWID | https://www.cnbc.com/2026/06/10/cpi-inflation-report-may-2026.html |
| bea-pce | US Bureau of Economic Analysis — PCE Price Index | T1 · Government / regulator / central bank | https://www.bea.gov/data/personal-consumption-expenditures-price-index |
| bls-cpi | US Bureau of Labor Statistics — Consumer Price Index | T1 · Government / regulator / central bank | https://www.bls.gov/cpi/ |
| marketplace-june-cpi | Marketplace — Will June inflation data affect interest rates? | T3 · Reputable press / research org / OWID | https://www.marketplace.org/story/2026/07/14/will-june-inflation-data-affect-interest-rates |
| jpm-outlook | J.P. Morgan — 2026 Economic Outlook (Midyear Update) | T3 · Reputable press / research org / OWID | https://www.jpmorgan.com/insights/markets-and-economy/economy/economic-trends |
| cnn-inflation | CNN Business — America’s inflation problems aren’t going away anytime soon | T3 · Reputable press / research org / OWID | https://edition.cnn.com/2026/07/13/economy/inflation-prices |
| fomc | Federal Reserve — Open Market Operations / FOMC target rate history | T1 · Government / regulator / central bank | https://www.federalreserve.gov/monetarypolicy/openmarket.htm |
| fed-jun2026 | CNBC — Fed interest rate decision, June 2026 (held 3.50%–3.75%) | T1 · Government / regulator / central bank | https://www.cnbc.com/2026/06/17/fed-interest-rate-decision-june-2026.html |
| mnd-treasury | Mortgage News Daily — 30-yr mortgage vs Treasuries | T3 · Reputable press / research org / OWID | https://www.mortgagenewsdaily.com/mortgage-rates/30yr-treasuries |
| bankrate-mortgage | Bankrate — Current mortgage rates | T3 · Reputable press / research org / OWID | https://www.bankrate.com/mortgages/mortgage-rates/ |

## Caveats & what this index cannot answer

- Forward FOMC decisions (this index shows the printed path, not projections).
- Whether the core PCE revision will prove correct (both outlook bars are labelled forecasts).
- Intra-month price volatility or intra-year rate moves (series are monthly prints and policy prints).
- Metro- or household-level inflation experience (CPI is a national basket average).
- This is an observational data index, not investment, legal, or medical advice.
- Estimates and forward targets are labelled in the working dataset; never read a labelled estimate or forecast as a settled figure.
- This is an observational data index, not investment, legal, or medical advice.

## Data freshness & methodology

- **Last updated:** 2026-08-11
- **Data as of:** 2026-06
- **What changed most recently:** June 2026: a fourth consecutive FOMC hold at a 3.75% upper bound, with headline CPI turning down from its 4.2% May peak while the year-end core PCE outlook was raised to 3.4%.

**Methodology (as seeded):**

> Six source-backed charts telling one connected macro story: the 2026 CPI path
> (headline vs core), the May 2026 CPI breakdown by category, the headline CPI’s
> mid-year turn (spring peak into the June cooldown), the year-end core PCE
> outlook (prior vs revised), the year-end fed funds target path (2021 → 2026),
> and a snapshot of current US benchmark rates.
> 
> Every numeric point carries a sources[].ref and a value_basis. CPI figures are
> BLS releases as reported by CNBC/Marketplace for each month; the core PCE
> outlook revision (2.9% → 3.4%) traces to J.P. Morgan’s midyear outlook, driven
> by the Strait of Hormuz oil, gas, fertilizer and helium shock. The fed-funds
> rate path is from the Federal Reserve’s published FOMC history; the June 2026
> hold (range 3.50–3.75%) is the fourth consecutive hold under Chair Kevin Warsh.
> The 10-year Treasury and 30-year mortgage are dated snapshots (mid/late June
> 2026).
> 
> CAVEAT: headline CPI and core PCE are different gauges, charted separately by
> design — the divergence between a falling headline and a rising core outlook
> is the point. The Feb 2026 CPI point shows headline only (core for that month
> was not in the cited reporting). Fed-funds points use the midpoint of the
> target range. Re-verified 2026-07-17.

---

_Free tier. The full row-level dataset and per-source detail live on the live page and in the working file. Canonical: <https://deepstoryresearch.com/data/us-inflation-fed>. Deepstory Research · https://deepstoryresearch.com_