Scope
Scope
Headline CPI will move markets this morning. It is not the number I'm watching.
The energy pass-through from the Hormuz shock is mostly arithmetic at this point — the YoY comparison against April 2025's pre-war $62 WTI makes the headline print largely predictable regardless of where it lands. The variable that determines whether the 2026 inflation path follows the consensus disinflation script is elsewhere.
What Changed
The Signal
Core goods MoM.
March printed +0.1% — still disinflationary, consistent with dollar strength suppressing import prices through most of 2025 and into early 2026. That tailwind is now gone. DXY is essentially flat YoY at 98.28, removing the currency suppression that kept goods prices contained.
What replaced it is a supply chain pressure shock that has not yet transmitted. The NY Fed Global Supply Chain Pressure Index accelerated from +0.68 in March to +1.82 in April, its highest reading since July 2022. That is not a drift — it is a supply-chain pressure shock. Import prices rose +0.8% MoM in March, including +0.6% for nonfuel imports, meaning the price impulse is no longer just an energy story. PPI final demand is already running at +4.0% YoY, while final demand goods rose +1.6% MoM in March. The question is whether that upstream pressure has started to bleed into consumer goods prices yet.
Per NY Fed Staff Report 1017, GSCPI has empirical explanatory power for inflation outcomes through local projections, with the relationship strongest at the producer-price level and meaningful for goods inflation transmission. Based on that transmission framework, the implied forward uplift to core goods CPI is in the range of 0.55-0.73 percentage points arriving Q4 2026 to Q1 2027 — a magnitude markets are not currently pricing.
The Drewry World Container Index hit $2,286 per 40-foot container on May 7, with carriers imposing Emergency Fuel Surcharges and Peak Season Surcharges simultaneously on May 1. The pipeline is real and it is building.
The consensus disinflation story for the back half of 2026 is built on energy base effects mechanically reversing in Q3. That reversal is coming and it is real. What the consensus is not pricing is a simultaneous core goods re-acceleration arriving in Q4 as GSCPI transmission completes — from a starting position where PPI final demand is already running at +4.0% YoY and freight surcharges are stacking.
Core goods MoM today is the first available data point for whether that transmission has begun. If it holds near +0.1%, the window extends. If it moves toward +0.3% or above, the Q3 disinflation narrative is intact on its own terms but the Q4 re-acceleration has a timestamp.
The Synthesis
Headline today is mostly arithmetic. Core goods MoM is the tape I'm watching. The GSCPI is already in the pipeline at a magnitude markets are not pricing. Today's print either starts the clock or delays it — it does not change the destination.
Hampson Strategies — Market Note · May 12, 2026
Not investment advice. Personal observations based on publicly available data.
© 2026 Andrew C. Hampson II / Hampson Strategies. All rights reserved.
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This is a personal log of market observations based on publicly available data. It is not investment advice, a recommendation, or a prediction. No action is suggested or implied.