In the latest edition of BGO’s newsletter, Chief Economist Ryan Severino explores the recent dynamics of U.S. inflation under the headline “What’s (Not) Up With Inflation?” He highlights a recent softening in May’s CPI and PPI figures—both headline and core—attributed to weaker macroeconomic activity, lower oil prices, inventory surges ahead of tariff hikes, tariff rollbacks, lagged price effects, corporate pricing power and housing inflation measurement delays.
Looking ahead, Severino warns of inflationary pressures if energy prices rebound due to Middle East tensions, inventory adjustments follow through, and lagged pricing appears. Early evidence of tariff-driven cost increases—such as rises in canned goods and computer components—are beginning to appear. While inflation currently remains contained, evolving economic dynamics may push it higher over the coming months, bearing implications for both macro policy and the CRE market.