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Tomorrow's report on May CPI will help to shape the inflation narrative for the rest of the summer. A stronger-than-expected report will be quickly seized upon by the anti-tariff contingency, and if there's a weaker-than-expected report, you can bet that President Trump will be on Truth Social singing the praises of tariffs. Earlier today, we tweeted that the Fed's CPI Nowcast was predicting headline CPI to rise 0.13% compared to a Wall Street consensus forecast of 0.2%, so if the Nowcast is right, get ready for some Truth Social posts!

Besides the Nowcast, seasonal trends suggest that a stronger-than-expected inflation print is less likely. The table and chart below show the frequency of stronger-than-expected, weaker-than-expected, and inline headline CPI prints from 1999 through 2024. Since 1999, the May CPI report (released in June) has only been stronger than expected 31% of the time. That ranks as the fifth-highest percentage of higher-than-expected readings of any month. Weaker-than-expected reports, however, are more common at 46% of the time. The only other month with a higher frequency of lower-than-expected headline CPI reports is November (released in December) at 50%.

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