💸 The Market Just Exhaled

Issue 159 - Hello and Happy Tuesday,

A Week Is a Long Time

Last Tuesday, things looked rough. Inflation had just hit a three-year high. The Fed was sounding less like it might cut rates and more like it might actually raise them. The mood was tense.

Then the weekend happened.

The US and Iran reached a deal to stop the fighting and reopen the flow of oil. Just like that, the biggest thing pushing prices higher started to ease. Oil dropped. Stocks jumped. Bonds improved. The whole market let out a breath it had been holding for months.

That is the thing about this business. The story can flip in a matter of days. The fear that ran the show last week is suddenly looking a lot smaller this week.

We are not all the way out of the woods. The deal is not signed until Friday, and the Fed meets on Wednesday with a brand new Chair running his first meeting. Plenty can still move between now and then.

But for the first time in a while, the wind is at our back instead of in our face. Keep your eyes on Wednesday and Friday. Those two days will tell us whether this turn has real staying power.

Personal Note:

Started our Summer journey of checking off fun things we had planned. In honor of the SpaceX IPO (not really, but a good excuse), we went and launched our rocket 5 times. Last flight had a parachute failure, which has us headed back to repair the damaged tail fins!

TLDR (Too Long Didn’t Read) Summary

• ⬇️ RATES - Finally easing down with peace deal on horizon.

• 📊 TECHNICALS - 2 major CPI numbers.

INTEREST RATES
Rates 📢 June 16th, 2026

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TECHNICALS
Two Numbers, One Story

May's inflation report looked hot on the surface and calm underneath. The gap between those two numbers is the whole story this week, and it is the reason the peace deal matters so much.

Look at the two lines on the chart. They have spent months drifting apart. Here is what each one is telling you.

The Headline Number: 4.2%

This is the number that grabs the headlines, and it climbed to its highest level in years.

• 📈 Headline inflation rose to 4.2% over the past year

• 🛢️ The jump was almost entirely energy, gas and fuel prices pushed higher by the conflict overseas

• 🌍 In other words, this was a war problem, not a whole-economy problem

The Core Number: 2.9%

Core inflation strips out food and energy to show what is happening underneath the noisy stuff. It tells a much calmer story.

• ✅ Core inflation sat at 2.9%, far below the scary headline figure

• 📉 Month to month, core rose just 0.2%, a mild reading

• 🧭 This is the number the Fed actually leans on, and it has been settling down

Why the Gap Matters

For months, energy has been the wedge holding those two numbers apart. The headline looked alarming while the core stayed tame. The peace deal goes right at that wedge. As oil comes down, the energy-driven headline number can start falling back toward the calm core number.

That is the convergence everyone should be watching. Not one number crashing, just the hot one cooling back in line with where the economy actually is.

👀 Watch this: The Fed meets Wednesday under new Chair Kevin Warsh, and core inflation is the figure that guides them. If the peace deal pulls energy down and the two numbers start to close the gap, that builds the case for lower rates over time. The story this week is not the headline. It is the distance between the two lines, and which way it moves next.