The U.S. Bureau of Labor Statistics released its inflation report
for June on July 14th.
June Inflation Summary:
The BLS reported Annual Inflation was down a seasonally adjusted -0.4% from May’s 4.2% to June’s 3.5%, this was the largest seasonally adjusted monthly decline since the COVID shutdown in April 2020.
Prior to April 2020, the next comparable drop was December 2008, in the depths of the financial crisis, when collapsing oil prices dragged the seasonally-adjusted CPI-U down sharply. The BLS’s April 2020 release referred to that drop as “the largest monthly decline since December 2008”. Fortunately, the current decline is more of a normalization after a massive war-induced spike than a collapse of demand like the prior two events.
- Annual Inflation Fell from 4.25% to 3.53%
- CPI Index Actually FELL from 335.123 to 333.952
- Monthly Inflation for June 2025 was 0.34% and June 2026 was NEGATIVE at -0.35%.
- Next release August 12th 2026
Annual Inflation Table
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
| 2026 | 2.39% | 2.41% | 3.26% | 3.81% | 4.25% | 3.53% | ||||||
| 2025 | 3.00% | 2.82% | 2.39% | 2.31% | 2.35% | 2.67% | 2.70% | 2.92% | 3.01% | NA | 2.74% | 2.68% |
| 2024 | 3.09% | 3.15% | 3.48% | 3.36% | 3.27% | 2.97% | 2.89% | 2.53% | 2.44% | 2.60% | 2.75% | 2.89% |
| 2023 | 6.41% | 6.04% | 4.98% | 4.93% | 4.05% | 2.97% | 3.18% | 3.67% | 3.70% | 3.24% | 3.14% | 3.35% |
BLS Commissioner’s Report
The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.4 percent on a seasonally adjusted basis in June after rising 0.5 percent in May, the U.S. Bureau of Labor Statistics reported today. This decline in the all items index was the largest 1-month decrease since April 2020 when it fell 0.8 percent. Over the last 12 months, the all items index increased 3.5 percent before seasonal adjustment…
The energy index fell 5.7% in June, the largest 1-month decline since April 2020, reversing three straight months of sharp increases (May +3.9%, April +3.8%, March +10.9%). Energy was the largest contributor to the monthly all-items decrease, more than offsetting gains in shelter and food. The shelter index rose just 0.1% in June, the smallest 1-month change since January 2021. The food index increased 0.2% over the month, with both food at home and food away from home up 0.2%. All items less food and energy was unchanged in June.
Factors Driving Current Inflation
The War in the Middle East closed the Straits of Hormuz, disrupting Oil flows driving up oil prices. In June, oil prices started moderating as some oil started getting through due to a ceasefire agreement. This is a totally different type of inflation than one induced by FED money printing.
The closure of the Strait of Hormuz represents a supply-side shock, fundamentally different in nature from monetary inflation. When the Fed expands the money supply, inflation is driven by too many dollars chasing the same goods; it’s a broad, diffuse phenomenon that erodes purchasing power across the economy and is more systemic. The Hormuz closure, by contrast, physically removes a critical input from the global economy, spiking energy costs that cascade through the economy but can be short-lived if the supply is restored quickly. Raising interest rates in response to this kind of inflation is counterproductive, since it strangles the demand side of an economy already being strangled on the supply side. This risks creating stagflation, i.e., the toxic combination of rising prices and a stagnant economy.
The question now is: if the ceasefire is collapsing, will oil flows be halted again, driving oil prices back up?
BLS Inflation Components:
Looking at Table A below, we can see that on an ANNUAL basis energy commodities like gasoline are still up significantly. But they did fall sharply in June. So most items on a monthly basis were down (green boxes). This is what “Transitory Inflation” is supposed to look like. Unlike when the FED previously claimed inflation was “transitory”. The difference is that the previous inflation was due to massive money printing, and this inflation was based on supply issues in the Straits of Hormuz.
June 2026 FED Summary:
Warsh’s First FOMC meeting was June 16–17, 2026
Kevin Warsh ran his first Federal Open Market Committee meeting as Fed Chair on June 16-17, and if you were expecting a victory lap for the doves, you were watching the wrong meeting. The Fed held rates steady at 3.50%-3.75%, which was never really in doubt. What mattered was everything around that decision, and on nearly every front, Warsh signaled he’s not interested in playing the game the way his predecessors did.
For more see: FED Monetary Policy and Inflation.
Last Month’s MIP Inflation Prediction vs. Actual:
As you can see from our MIP projection from last month, June inflation was much lower than our “Extreme Low”. Most economists were predicting that June’s inflation numbers would come in around 4.2% (as we were). But the opening of the Straits of Hormuz drastically reduced oil prices, which dropped overall inflation significantly.
A major limitation of the MIP chart is that it can only make projections based on historical averages and can’t predict things like Wars and Hurricanes and related economic changes.
Go here to view our current MIP projection.
Inflation Chart
Monthly Inflation Compared to Previous Years:
Typically, when we talk about inflation, we are talking about the change in prices (price inflation) on a yearly or annual basis, i.e., how much prices have changed since last year. Generally, this is because the monthly changes are small and tend to fluctuate in both directions, but usually add up to measurable inflation on an annual basis.
The monthly inflation rate for June 2026 was negative, i.e., disinflationary -0.35% compared to 0.63% in May 2026 and 0.34 a year ago.
See: Monthly Inflation Rate for more information and a complete table of Unadjusted Monthly Rates.
Misery Index
Unemployment 4.20% + Inflation 3.53% = 7.73%
This month, inflation is down sharply, and unemployment is down slightly, so the misery index fell from 8.55% to 7.73%. It is considerably below the June 2022 peak, when the index was at 12.66%.
Read More on the Misery Index…
Rate of Change
The NYSE ROC chart generated a BUY signal in January.
The NASDAQ ROC generated a BUY signal back in September.
BTC had a fake-out buy signal (that we didn’t fall for) and is now back in sell territory.
see: Crypto ROC.
ETH is staging a minor comeback; ETH dominance is rising, primarily because of its use case as traditional finance shifts towards the blockchain. If you are looking to ride the next crypto bull wave, this might be a good place to begin tentative accumulation, perhaps by starting a dollar-cost averaging program.
For more information, see: Crypto ROC.
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