CPI Drops 0.4 Percent M/M, the Largest One-Month Decrease Since April 2020

The bond market reaction suggests the decline is temporary. I concur. Gasoline was a key component, down 9.7 percent in June.

The BLS reports the Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.4 percent on a seasonally adjusted basis in June after rising 0.5 percent in May.

This decline in the all items index was the largest 1-month decrease since April 2020 when it fell 0.8 percent. Over the last 12 months, the all items index increased 3.5 percent before seasonal adjustment.

The BLS rounds to 1 decimal point. I show 2 decimal places

CPI Month-Over-Month

• All Items: -0.42 percent
• All Items Excluding Food and Energy: -0.02 percent
• Food and Beverage: 0.20 percent
• Shelter: 0.12 percent
• Owners’ Equivalent Rent: 0.24
• Rent of Primary Residence: 0.15
• Medical Care Services: -0.12 percent
• Medical Care Commodities: -0.16 percent
• Energy: -5.71 percent
• Gasoline: -9.69 percent
• Food at Home: 0.19 percent
• Food Away from Home: 0.23

CPI Month-Over-Month Energy, Gasoline, Utilities

Energy, Gasoline, Utilities and Fuel Month-Over-Month

• Energy: -5.71 percent
• Gasoline: -9.69 percent
• Utilities and Fuel: -0.35

Looking ahead, Trump’s moves in the strait will cause gasoline prices to jump up again.

Five Measures of Inflation

Five Measures of Inflation Year-Over-Year

• CPI : 3.5 percent – Bottom April 2025 at 2.3 percent
• Core CPI: 2.6 percent – Bottom February 2026 at 2.46 percent
• CPI Rent: 2.8 percent – Bottom March 2026 at 2.56 percent
• PCE: 3.77 percent – Bottom September 2024 at 2.26 percent
• Core PCE: 3.29 percent – Bottom April 2025 at 2.61 percent

PCE numbers are as of May2026, CPI as of June 2026.

CPI Year-Over-Year Percent Change Major Categories

Small Price to Pay

This is a small price to pay if you focus on the mission.

Q: What’s the mission?
A: Our mission is to return the strait to where it was before we started this war.

The mission is going spectacularly because Iran has no cards.

Truth Social: The Iranians don’t seem to realize they have no cards, other than a short term extortion of the World by using International Waterways. The only reason they are alive today is to negotiate! President DONALD J. TRUMP

That Truth Social post has been superseded.

Guardian of the Strait

The Hormuz Strait is OPEN, and will remain OPEN, with or without Iran. We are reinstating the THE IRANIAN BLOCKADE, so named because it is only stopping Iran’s ships or customers from entering or leaving. All other countries will have fair and open use of the Strait. The U.S.A. will be, from this point forward, known as “THE GUARDIAN OF THE HORMUZ STRAIT,” but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World. The process and formation will begin immediately. Thank you for your attention to this matter! President DONALD J. TRUMP

Jul 13, 2026, 8:16 AM

Please note that on July 13, 2026 Trump Says the US Is the Hormuz Strait Guardian, Will Charge 20 Percent Fee

Average Fee Under Trump vs Iran

• The EIA says the average tanker carries around $150–180 million in oil. That would make the US Guardian Fee $30 million to $36 million.
• Iran wants to collect $1 to $2 million.

Reflections on Fees

In the Fox News Video Trump says the US will become the “Guardian Angel of the Strait” and “We should be reimbursed for that.”

“The other nations are very wealthy and are on our side. We can’t be expected to do that for nothing.”

“We guarded the strait for 50 years and never got paid for it.”

How Many Countries Would Pay the US 20 Percent?

I believe none.

Instead, assume they all will. The price of oil at the pump would immediately go up by 20 percent.

Trump’s fee proposal will soon provoke international outrage.

We have gone from no fees to a $1 million fee to 20 percent cargo fee by the US that amounts to $30 million to $36 million.

Iran is laughing.

I would say that Trump has lost his mind, but that happened long ago.

Looking Ahead Three Things

• The price of oil has bottomed.
• Republicans will be hard pressed to pass any additional legislation.
• Gas prices heading back up won’t help Republican chances at the midterms.

Yesterday, I commented Congratulations to Trump for Spiking the Price of Oil and Bond Yields

Not everyone has powers like this.

Key CPI Takeaway

Today, despite a very favorable CPI report, bond yields barely budged.

That reaction suggests the June CPI decline is temporary.

I concur, and that’s the key takeaway from the CPI report.