The week of May 14 delivered a cluster of inflation and spending data that left no doubt about the Fed's near-term path. CPI, PPI, and retail sales all printed within hours of each other, bookended by Kevin Warsh's Senate confirmation as Fed Chair. Here is what the data actually showed.
What did CPI show for April 2026?
The Consumer Price Index rose 0.6% month-over-month in April, released May 12, putting the 12-month rate at 3.8%, the highest annual rate since May 2023 and above the 3.7% consensus. Core CPI, excluding food and energy, came in at 0.4% month-over-month and 2.8% year-over-year, the highest monthly core reading since January 2025. Energy prices jumped 3.8% on the month and 17.9% year-over-year, accounting for more than 40% of the headline gain, driven by gasoline up 28.4% annually. The Iran-driven oil price shock is feeding into consumer prices with a lag. Real average hourly wages slipped 0.5% for the month.
What did PPI show for April 2026?
The Producer Price Index rose 1.4% month-over-month in April, released May 13, the largest single-month advance since March 2022 and well above consensus. On a 12-month basis, final demand PPI rose 6.0%, the largest annual increase since December 2022. Transportation and warehousing services for intermediate demand jumped 3.7%, with truck freight costs surging 8.1%. The PPI reading signals that producer-level inflation is not cooling, raising the probability of further pass-through to consumer prices in coming months.
What did retail sales show for April 2026?
Retail and food services sales rose 0.5% month-over-month in April, released May 14, matching the consensus forecast. Year-over-year sales were up 4.9%, the strongest annual reading since August 2025. Core retail sales excluding autos rose 0.7%, in line with expectations. Gasoline station sales climbed 2.8% as energy prices flowed through. The control group, the Fed's preferred measure of consumer spending, rose 0.5% for the fourth consecutive increase. Consumers are still spending, but most of the nominal gains are being absorbed by energy costs rather than real consumption growth.
What does Kevin Warsh's confirmation mean for rates?
Warsh was confirmed as Federal Reserve Chair in a 54-45 Senate vote on May 13, the most divisive Fed chair confirmation in modern history. He takes over from Jerome Powell, whose term as chair ended May 15. Warsh has called for rate policy to be lower and stated a belief in "regime change" at the Fed. However, with CPI at 3.8%, core CPI at 2.8%, and PPI surging 1.4% in a single month, the data environment does not give Warsh room to cut. FedWatch showed approximately 98.6% probability of a hold at the June 16-17 meeting. The tension between Warsh's stated preferences and the inflation backdrop is the dominant macro theme for the rest of 2026.
What are the AI chip and crypto signals showing?
TSLA, NVDA, and MU continued to see call-heavy options flow, reflecting ongoing appetite for AI-adjacent names. ETH ETFs saw net outflows of approximately $142 million and BTC ETFs approximately $239 million for the week, the beginning of what would become the record 10-session outflow streak starting May 15. Crypto Fear and Greed sat at 34 (Fear), beginning its move toward extreme fear territory that would define the final two weeks of May.
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