Inflation stickiness is more stubborn than we expected—will we finally get to exhale only in the second half of 2026? For now, hang in there and keep it tight with your cash.

Donnelley Securities says May’s CPI may show that while inflation is slowing, it remains at a high level. Core CPI was 0.23% month-on-month and 2.8% year-on-year; headline CPI was 0.40% month-on-month and 4.2% year-on-year. Goods rose 0.13% month-on-month; core goods increased excluding automobiles, with home and apparel prices being raised, while used car prices may fall again, offsetting part of the gains. Oil prices and tariff pass-through may lift core year-on-year inflation to around 3.0% in June; if airline fuel costs are passed through to airfare, there is an upside risk. Looking ahead to the second half of 2026, core inflation is unlikely to fall significantly; housing costs are moving from high levels toward normalization, and core goods excluding automobiles remain strong.