CPI month-over-month in Jun 2026?

rationale:

Our assessment strongly points to a negative headline CPI print for June 2026, most likely centering on -0.1% (37%) or -0.2% (33%), with 0.0% as a secondary possibility (15%). The primary driver is a sharp reversal in energy prices following the mid-June de-escalation of the Strait of Hormuz crisis.

Energy Reversal and Gasoline Drag May's hot +0.5% m/m print was heavily skewed by the geopolitical energy spike, with energy adding 0.287 percentage points to the headline and gasoline alone contributing 0.269 points bls.gov bls.gov. Following a tentative ceasefire and the reopening of the strait around June 14-16, oil prices collapsed by roughly 21% to ~$77/bbl. Retail gasoline prices mirrored this plunge: EIA weekly regular gasoline fell from $4.305 on June 1 to $4.052 by June 15 eia.gov, and the AAA national average dropped to $3.99 by June 18 gasprices.aaa.com. Compared to May’s BLS gasoline average of $4.651 fred.stlouisfed.org, the June gasoline index is on track for a month-over-month decline of roughly 9% to 10%. Given gasoline's 3.94% relative importance in the CPI basket bls.gov and nearly identical May/June seasonal factors bls.gov (meaning seasonal adjustments will not offset the drop), this translates to a massive -0.33 to -0.40 percentage-point drag on headline inflation.

Component Build and Stale Nowcasts While energy is plunging, core inflation remains firm. We project core CPI to add roughly +0.20 to +0.23 percentage points to the headline, consistent with recent underlying trends clevelandfed.org, alongside a modest +0.03 point contribution from food. Aggregating these components yields a net headline print of roughly -0.05% to -0.15% before rounding, aligning closely with exactly -0.1% or -0.2%. Notably, the Cleveland Fed nowcast, which suggested a headline print of +0.02% to +0.07% clevelandfed.org clevelandfed.org, is stale. It was last updated on June 12, predating the bulk of the subsequent crash in pump prices, and significantly overstates energy's contribution relative to late-June market realities.

Tail Risks With two-thirds of the month already locked in alongside falling gas prices, upside potential is highly constrained. However, we maintain a small probability on extreme right-tail outcomes (1% each for +0.5% and +0.6%) to account for the slim possibility of a rapid geopolitical re-escalation that quickly spikes oil, or a severe and unexpected shock to core inflation. The 'Exactly 0.1%' outcome (3%) sits in the low-probability valley between our baseline component build and these extreme shock scenarios. Conversely, we allocate 2% to 'Other', primarily to capture the left-tail risk (prints of ≤ -0.4%) should the energy collapse deepen further or core services unexpectedly soften.