What is CPI?
CPI
The Consumer Price Index is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services, produced by the U.S. Bureau of Labor Statistics. Commentary in 2026 tracked its level and trajectory against other inflation gauges and market signals.
How it developed
- May 2026 - Jack Farley said CPI headlines would probably print in the fours by the end of the year.
- Aug 2026 - Austan Goolsbee noted that even as CPI pushed close to 10% inflation, inflation compensation in TIPS held steadily at 2.3%.
- Sep 2026 - Mike Green said CPI methodology was set up to address the Federal Reserve’s early-1980s behavior under Volcker, when it created its own inflation by not understanding how mortgage rates passed through to CPI.
- Sep 2026 - Tom Lee said the August number was more likely to drop to 2.3% year-over-year.
- Sep 2026 - Tom Lee said core PCE is up because of the stock market and flash memory compared with CPI.
In the evidence
Every line below is attributed to a named speaker.
TIPS-implied inflation compensation held steady at roughly 2.3% CPI even as actual CPI approached 10%, suggesting the Fed's 2% target functioned as a credible anchor.
“Even as CPI was pushing close to 10% inflation, if you looked at inflation compensation in the tips, it remained steadily at 2.3% CPI.”Austan Goolsbee · 28 Aug 2026
Tom Lee predicts August core CPI (reported that Friday) will drop to 2.3% year-over-year.
“When Friday comes around when we get the August number, it's more likely to drop to 2.3% year-over-year.”Tom Lee · 10 Sep 2026
CPI owner's equivalent rent methodology was designed to stop the Fed from repeating the Volcker-era mistake where rising mortgage rates fed directly into measured inflation, causing the central bank to inadvertently generate the inflation it was fighting.
“All the methodology around CPI was set up to address the fact that the Federal Reserve in 19 in the early 1980s under Vulker behaved in a terribly irresponsible manner in which they created their own inflation because they did not understand how mortgage rates passed through to the CPI itself. That is where the owner's equivalent rent came in.”Mike Green · 9 Sep 2026
The gap between core PCE and core CPI is largely driven by stock-market-linked portfolio management fees and flash memory prices, not broad consumer inflation.
“The reality is that core PCE is up because of the stock market in flash memory compared to CPI.”Tom Lee · 10 Sep 2026
Farley forecasts US CPI headline inflation printing in the 4% range by end of 2026.
“CPI headlines probably going to print in the fours by the end of the year.”Jack Farley · 8 May 2026