Headline CPI: -0.4% MoM (vs. -0.1% expected) — the largest 1-month drop since April 2020 — YoY down to 3.5% (from 4.2% in May, vs. ~3.8-3.9% expected). Core CPI: 0.0% MoM (vs. +0.2% expected), core YoY 2.6% (vs. 2.8% expected). Driven by energy -5.7% MoM (gasoline -9.7%). Confirmed market reaction: 10-yr Treasury yield fell more than 5bp to 4.555%, 2-yr down 8bp to 4.181%; MBS (UMBS 5.0) rallied over half a point (+0.51).
Warsh testimony: Fed Chair Kevin Warsh completed roughly 3 hours before the House Financial Services Committee — his first congressional appearance as chair. No explicit signal on the next rate move; he pledged to make the "inflation surge of the last five years... a thing of the past," reaffirmed Fed independence when pressed on political influence, and outlined five internal task forces (communications, balance sheet, economic data, productivity/jobs, and the Fed's approach to inflation). Senate Banking testimony follows tomorrow.
IBM crushed: Shares cratered roughly 25% intraday — on pace for its worst day since Black Monday 1987 — after CEO Arvind Krishna warned Q2 revenue ($17.2B vs. $17.85B est.) and EPS ($2.93 vs. $3.02 est.) will miss expectations, citing IBM "faltering" on capturing AI's upswing. Roughly $67B in market cap erased; dragging the Dow down about 450 points.
All 5 big banks now reported, all beat: Citigroup EPS $3.15 vs. $2.74 est. — beat every analyst estimate (net income $5.8B, revenue $24.8B +14% YoY, equities trading +45% YoY). Bank of America EPS $1.21 (+7.7% vs. consensus), revenue $31.56B (+14.2% YoY). Wells Fargo and Goldman Sachs also topped estimates, alongside JPMorgan's record quarter reported earlier this morning.
Oil/Hormuz risk reviving inflation fears: Brent crude jumped as much as 3.8% today to ~$85.92/bbl — highest since mid-June — as the US-Iran Strait of Hormuz conflict escalates into a third day (transits through the strait down more than 50%). Eurasia Group and TD Securities warn of $95-100/bbl if disruption worsens. This is starting to offset this morning's CPI relief: mortgage rate quotes are mixed-to-higher by midday (Mortgage News Daily's top-tier rate back to 6.75%; several surveys note rates at the "highest levels of the year"), suggesting this morning's MBS gains are fading. Polymarket's odds of a July 29 Fed hike have climbed back to roughly 33%, up from the ~19% quoted this morning.
Tuesday, July 14: June CPI came in dramatically cooler than expected this morning (headline -0.4% MoM, core flat at 0.0%), sparking a bond rally — but by midday that relief is being tested by an escalating Iran/Hormuz conflict pushing oil and mortgage rates back up, even as all five big banks post beats and Fed Chair Warsh wraps his first House testimony. IBM craters ~25% on an AI-related guidance cut, its worst day since 1987.
CPI, actual (BLS): Headline -0.4% MoM / 3.5% YoY; Core 0.0% MoM / 2.6% YoY — a clean miss to the downside on both headline and core, driven by a 5.7% MoM drop in energy (gasoline -9.7%) that swamped modest gains in shelter (+0.1%) and food (+0.2%).
Banks — full scorecard: JPMorgan's blowout quarter (EPS $6.14 vs. ~$5.85 est., revenue $58B, record profit on a ~$6B trading windfall) was followed by beats across the board: Citigroup ($3.15 EPS vs. $2.74 est.), Bank of America ($1.21 EPS, +7.7% vs. consensus), plus Wells Fargo and Goldman Sachs also topping estimates. CNBC: "Big banks report blowout profits."
IBM: Shares down ~25% after CEO Krishna's guidance warning tied to AI concerns — the stock's worst single day since the 1987 Black Monday crash, dragging the Dow down ~450 points.
Hormuz/oil: Brent crude up as much as 3.8% today (~$85.92/bbl, highest since mid-June) as US-Iran fighting over the Strait of Hormuz continues into a third day, reviving inflation-risk pricing just hours after the soft CPI print.
Pre-CPI published rate (8:23 AM): Conventional 30-yr 6.750% (+0.110 that day).
Post-CPI market move (8:34 AM): MBS (UMBS 5.0) rallied to 97.60, +0.51 on the day; 10-yr yield down to 4.555% (confirmed, holding through midday).
Midday reversal risk: Despite the morning bond rally, Hormuz-driven oil spike is pressuring rates back up — Mortgage News Daily's top-tier 30-yr is back to 6.75%, and several rate surveys show 30-yr quotes at or near the "highest levels of the year" by midday. Net effect for clients today may be closer to flat than the morning rally suggested — worth checking MBS Live directly for the latest reprice status before quoting anyone.
Sourced from the command center's calendar panel, BLS releases, and live coverage of Warsh's testimony.
Headline CPI -0.4% MoM / 3.5% YoY (vs. -0.1%/3.8-3.9% expected) — biggest monthly drop since April 2020. Core CPI 0.0% MoM / 2.6% YoY (vs. +0.2%/2.8% expected) — a clean downside miss. Driver: energy -5.7% MoM (gasoline -9.7%). Talking point: a genuinely good print, not just a gas-price mirage — core came in soft too.
Oil spiking on the escalating Hormuz conflict (Brent +3.8% today, third day of US-Iran fighting) is already chipping away at this morning's bond rally. Mortgage rates that should have improved on the CPI news are instead mixed-to-higher by midday — MND's top-tier rate back to 6.75%. Talking point: good inflation data can get overrun by a geopolitical energy shock in the same news cycle — don't assume the morning's rally survives the day.
All 5 majors have now reported and all beat: JPMorgan (record quarter, $6.14 EPS), Citigroup ($3.15 EPS, beat every analyst estimate), Bank of America ($1.21 EPS, +7.7% vs. consensus), plus Wells Fargo and Goldman Sachs. Contrast: IBM down ~25% — worst day since 1987 — on an AI-related guidance cut. Strong banks = healthy lending capacity, but also less pressure on the Fed to cut.
Warsh's ~3-hour House testimony: no new rate signal, pledged to defeat inflation, reaffirmed Fed independence, unveiled 5 internal task forces. Senate testimony and June PPI both drop tomorrow — see Dan's PPI forecast below.
Buyers: don't assume this morning's rally locks in — check pricing before acting. Realtors: mixed signals today, temper client expectations. Loan officers: confirm actual reprice status before quoting; the oil/Hormuz story could keep moving rates through the week.
Tease tomorrow's PPI print plus Fed Chair Warsh's Senate Banking testimony, and continued Hormuz watch.
May 2026 actual (recap): Headline PPI +1.1% MoM (vs. +0.7% expected) — a hot beat; YoY 6.5%, highest since Nov 2022. Core PPI +0.4% MoM (vs. +0.5% expected), core YoY 4.9%. ~80% of the May acceleration came from a 2.8% surge in final-demand goods prices, driven by a 10.7% jump in energy (wholesale gasoline +23.4%).
Dan's forecast for June PPI (releases tomorrow, Wed Jul 15, 8:30 AM ET): Expect a cool-down on the headline number since June's gas-price drop should reverse some of May's energy-driven spike — though today's renewed oil spike from the Hormuz conflict is a wildcard that could complicate the read-through for July's data. Headline YoY likely eases from 6.5% toward the 5.5-6.0% range. Core PPI probably holds a bit stickier, maybe +0.2-0.3% MoM, with core YoY drifting toward roughly 4.5-4.7%.
This is Dan's own directional read, not an official BLS or consensus forecast.
Fed Chair Kevin Warsh testifies before the Senate Banking Committee tomorrow, a day after today's House testimony. Bank earnings season continues through the week (Morgan Stanley, BlackRock, BNY Mellon, PNC on Wednesday; US Bancorp Thursday; Truist Friday). The US-Iran Strait of Hormuz conflict is now in its third day and actively moving oil and rate markets in real time — this is likely the dominant swing factor over CPI/PPI data for the rest of the week.
