Worldview Thesis

Stagflation risk and Fed independence stress

Active

What changed

The headline signal — how confidence moved from the previous snapshot, and why.

vs 2.1.20.00 —
0.820.82

Held at 2.1.2 levels (0.82 ± 0.04). No new CPI / PPI / PCE / wage data in the 11.4-hour window. The Monday cash-session 10Y yield closed at 4.601% (vs 4.59% Friday) - a slight breather from the 4.61-4.63% intraday high after Trump called off Tuesday Iran strikes. Global yields (German bund, JGB) still at multi-year highs. The macro mean that drives this thesis has not moved. Beta(33, 7.2) parameterization continues to encode ~40 effective independent observations. April PCE on May 28 is the next primary move, then June 16-17 FOMC.

The thesis

The claim and where confidence stands now.

μ 0.8201
Beta(33, 7.2) · 95% CI [0.74–0.89]

April CPI on May 12 fired the energy-passthrough binary tell directly: headline 3.8% YoY (highest since May 2023), core 2.8% YoY. April PPI on May 13 ran hotter than CPI - headline +1.4% m/m / +6.0% YoY, core +1.0% m/m / +5.2% YoY (highest in three years). April import prices on May 14 added +1.9% m/m / +4.2% YoY (largest YoY since October 2022) with imported fuel +16.3% m/m. Friday May 15 delivered the sharpest single-session rate-path repricing of the cycle: oil +4.5% (WTI to $106, weekly +11%), the 10Y to 4.59% (up ~13bps in one day, fresh ~1-year high, biggest weekly yield jump since April 2025), and CME FedWatch hike-by-December odds to ~56% from ~36% Thursday and ~16% a week earlier - a 20pp single-day move. Monday May 18 morning extended the repricing: 10Y to 4.61-4.63% with Japan 10Y at 29-year high, UK gilt 18-year high, German bund 15-year high; WTI to $107.98 (+2.43% Monday) and Brent above $110 ($111.42) reinforce the energy-passthrough inflation feed-through. The bond-market rout is global, with longer- dated yields most affected and 30Y to the cusp of the 2023 peak. Powell exited chair Friday with conciliatory final remarks; Warsh now chair, first public statement still ahead. Calendar: April 29 FOMC minutes Wednesday May 20 2 PM ET, Walmart Q1 FY2027 Thursday May 21 pre-open, April PCE the formal invalidation indicator on May 28.

Drivers

The underlying macro forces this thesis expresses - the loading mean is how much each force drives the thesis, the stddev our confidence in the mapping.

Supporting evidence

Typed, citation-backed observations across time, grouped by strength. Hover a point for the claim.

StrongModerateMay 12 · April CPI headline came in at 3.8% YoY, the highest since May 2023. Core 2.8% YoY confirmed the energy-passthrough framing was material.May 13 · April PPI ran hotter than CPI - headline +1.4% m/m / +6.0% YoY, core +1.0% m/m / +5.2% YoY (highest in three years).May 14 · April import prices added +1.9% m/m / +4.2% YoY (largest YoY since October 2022) with imported fuel +16.3% m/m.May 15 · 10-year Treasury yield closed Friday at 4.59%, up ~13bps in one day - fresh ~1-year high and biggest weekly yield jump since April 2025.May 15 · CME FedWatch hike-by-December odds moved to ~56% from ~36% Thursday and ~16% a week earlier - a 20pp single-day repricing.May 15 · The Friday bond-market rout was global, with longer-dated yields most affected; 30-year US Treasury yields traded to the cusp of their 2023 peak.May 18 · 10-year Treasury yield rose to 4.61-4.63% Monday May 18, up ~3bps from Friday's 4.59% - extending the global bond rout rather than retracing. 14bp surge from May 14 cumulatively.May 18 · Monday May 18 global sovereign bond yields extended Friday's rout to multi-year highs - Japan 10Y at 29-year high, UK gilt at 18-year high, German bund at 15-year high. The cross-border repricing of inflation-and-deficit risk continues unabated.May 18 · 10-year Treasury yield closed Monday May 18 at 4.601% - the intraday high of 4.61-4.63% pulled back as the strike-cancellation flow crossed the wire. Net +0.01% from Friday's 4.59%; bond market took a breather Monday after the Friday rout. German bund still at multi-year highs, JGB 10Y at 29-year high - global structural pressure intact.May 15 · April 29 FOMC minutes scheduled for release Wednesday May 20 at 2 PM ET, detailing the historic 8-4 dissent debate.May 15 · April PCE release scheduled for Thursday May 28 at 8:30 AM ET - the formal invalidation indicator for the stagflation thesis.May 15 · Jerome Powell completed his Fed chair-term exit Friday May 15 2026, transferring chairmanship to Kevin Warsh. Powell retains his governor seat on the Board through 2028.May 13 · Senate confirmed Kevin Warsh as Federal Reserve Chair 54-45 on Wednesday May 13 - the narrowest modern-era margin since the current approval process was put in place in 1977. Fetterman (D-PA) was the only Democratic crossover.May 14 · April retail sales +0.5% m/m (third consecutive monthly increase), core +0.7% - the consumer is absorbing the energy passthrough notwithstanding the highest CPI in three years.May 10 · University of Michigan May consumer sentiment preliminary at 48 - matching the all-time-low historical readings. 1-year inflation expectation at 4.5%.May 18 · WTI rose to $107.98 Monday May 18 morning, +2.43% on the day - building on Friday's +4.5%. Direct tactical confirmation of the structural undersupply reading; oil follow-through is not a single-session repricing.May 18 · Brent rose to $111.42 Monday May 18 morning, +1.98% on the day - through $110 for the first time since the Friday breakout. The international benchmark follows WTI through to confirm the multi-session structural escalation.May 18 · WTI June futures settled Monday May 18 at $108.66, +3% on the session - building on Friday's +4.5%. After settle, oil eased in extended trading as Trump cancelled Tuesday Iran strikes and the US negotiation text reportedly accepted Iran oil sanctions waiver during negotiation period.May 18 · Brent crude futures settled Monday May 18 at $112.10, +2% on the session. After settle, eased back below $110 in extended trading on the strike-cancellation and sanctions-waiver flow - structural settled higher, after-hours tactical softening.May 10May 18

What would invalidate this

The machine-evaluable conditions that would falsify the thesis.

Or
And
Threshold
ObservableCore PCE YoY
ComparatorLess Than
Threshold2.5
Condition
Duration3
Window UnitMonths
Threshold
ObservableUS Unemployment Rate
ComparatorBetween
Threshold4
Threshold High4.5
Condition
Duration3
Window UnitMonths