Macro report · Chapter 03 of 10

Inflation

Sticky and re-accelerating — the core of the call.

Updated July 4, 2026 1 min read Synthos Macro Engine

Headline CPI: +4.3% YoY, +8.92 index points over six months — the six-month impulse is UP.

Core CPI: +3.0% YoY, +5.08 over six months.
Core PCE: +3.4% YoY, +2.61 over six months — the Fed's preferred gauge is well above target and rising.
5y breakevens: 2.24%, +0.05 over six months — the market's medium-term inflation expectation is edging up, still anchored but drifting.

Meaning: Inflation is NOT cooling — the six-month change on every price series is positive. Forward Guidance nails the structural floor: "core inflation floors near 3%, not 2%, while government runs 5-6% deficits; Fed tools can't fix fiscal-driven inflation." Gromen goes further: the "AI-driven disinflation" story is "a fairy tale — data centers cost more to build, so growth drives higher rates and inflation." Darius Dale adds the timing warning: "inflation is the most lagging business-cycle indicator; won't durably return to Fed's 2% target without an actual recession" (darius_dale-c9eRKCK7-C8:853f7684fb). We side with the data: reflation with an inflationary bias.