05/17/2026
π Inflation is heating back up again.
The latest CPI report came in hotter than expected:
π Headline CPI: 3.8% YoY
π Core CPI: 2.8% YoY
And markets are paying attention π
β½ Consumers are still feeling pressure:
From gas prices to everyday expenses, inflation remains sticky across much of the economy.
π Meanwhile, bond yields continue climbing:
β’ The 2-year Treasury is near 4%
β’ The 20- and 30-year yields are approaching 5%
π‘ Hereβs the big shift:
Markets started the year expecting rate cutsβ¦
Now?
Thereβs growing belief the Fed may keep rates higher for longer β and could even hike again.
β οΈ That creates a tricky setup:
β’ Bonds donβt love potential easing
β’ Stocks donβt love tighter policy
β’ And any major move could increase volatility
π€ Macro analysts are also pointing to strong credit growth and resilient economic activity as reasons the Fed may stay cautious.
π The takeaway:
Inflation is still the story.
And understanding what tends to work during inflationary environments may matter more than ever in the months ahead.