# There Is No Modern Playbook for This. US Core Inflation at 3.3%, Re-Accelerating. Producer Prices at 6.4%. Consumer Delinquencies Past 2007. Published: 2026-06-12 **There is no modern playbook for this.** US core inflation - the gauge the Fed targets at 2% - is at **3.3% and re-accelerating**. Outside Covid, it was last at this level in 1992. For 25 years before Covid it averaged 1.7%. **It has now spent 62 straight months above target.** And the pipeline says more is coming. **Producer prices are rising 6.4%**, the hottest in the modern series outside Covid. Somebody has to pay - corporate margins, consumer paychecks, or both. Consumer delinquencies are already past their 2007 pre-crisis mark. Meanwhile the S&P set a record on June 2. The last two times the market was priced like this while the economy cracked underneath - **2000 and 2007** - the index halved. **Full note in the carousel.** --- - Prior analysis: [tigzig.com](https://tigzig.com) -> Analysis - Series live at [tigzig.com](https://tigzig.com) -> Tremor. 300+ indicators. Run your own cuts. - AI-agent-first: point your AI (Claude, Claude Code, Codex, Cursor, any of them) at agents.tigzig.com and have it run the cuts you want. Just shoot your questions... they know what to do. --- ## Full Deck Content (Text Format) ### Slide 1 - There is no modern playbook for this This is US consumer inflation - **core PCE**, the measure the Fed targets at 2%. For 25 years it averaged **1.7%**. Covid broke that anchor, the gauge never made it back, and it is re-accelerating: **3.3% and rising**, before the new oil shock has fully passed through. > Outside Covid, the last time this gauge stood here was **1992** - now **62 straight months above target**. Every playbook younger than that assumes the anchor holds. ### Slide 2 - Upstream, it is even hotter Producer prices - what businesses pay before anything reaches a shelf - are rising **6.4%** a year. Outside the Covid spike, that is the hottest reading in the modern series. **Core PPI**, with food and energy stripped out, says the same thing at **4.9%**. > Wholesale inflation only partly flows downstream - but at 6.4%, even partial pass-through keeps the consumer number rising. **The pressure is upstream of the shelf.** ### Slide 3 - Somebody has to pay The bill is always shared - some passes to the shelf, some stays on the producer's books. Right now producer prices are running **2.2 points** ahead of consumer prices, so the bigger share sits with the producer: **margin compression**. > Either margins give, or prices do. **Both roads lead through the consumer.** ### Slide 4 - The consumer is already stretched Whatever does get passed on hits a household with little slack left. Gasoline at **$4.65** - only June and July 2022 were ever higher. And **3.4%** of consumer debt is already in that 90+ bucket, past the **3.1%** mark of late 2007 and more than double the end-2022 low. > A squeezed paycheck resolves two ways: **spend less**, which feeds back into growth, or **miss payments**. The lower line says the second is already happening - **rising in 12 of the last 13 quarters**. ### Slide 5 - Priced as if none of this is happening Against all of the above, the S&P set a record on June 2. Valuations sit near their highest in **145 years** - only the dot-com peak ran higher - while consumer sentiment is at its lowest in **73 years** of data, and a handful of AI names do most of the lifting. > The last two times the market was priced like this while the economy cracked underneath - **2000 and 2007** - the index halved. Both are on the chart. ### Slide 6 - Previous analysis, sources & method #### Previous analysis - this series - **[Markets at a record while the economy hurts](https://www.tigzig.com/post/us-valuations-record-sentiment-low-jun2026)** - peak valuations, record-low consumer sentiment. 8 Jun 2026. - **Three red flags hit together** - 30Y at 5.14%, PPI heating, Brent above $100. 20 May 2026. - **Are we headed for stagflation-lite?** - the Fed caught between inflation and weak jobs. 28 Mar 2026. #### The data tools - **PPI, core PCE, gasoline, the S&P and the NY Fed consumer-credit series are live on [tigzig.com](https://tigzig.com) -> Tremor** - a macro early-warning dashboard, 100+ indicators. - Agent-first portal with MCP servers and free APIs: [agents.tigzig.com](https://agents.tigzig.com) - point your AI at it. #### Sources & method - Series: core PCE `PCEPILFE` · PPI Final Demand `PPIFIS` · core PPI `PPIFES` · CPI `CPIAUCSL` · gasoline `APU000074714` · NY Fed 90+ DPD stock · S&P 500 daily. YoY from seasonally adjusted indexes; pulled 11 June 2026. - Core PCE was last at or above today's **3.3% (outside Covid) in April 1992**; above the 2% target every month since March 2021; **1995-2020 average 1.7%**. - The PPI Final Demand series begins in 2010 and does not cover the 1970s-80s; the Covid window excluded is 2021-2023. Gasoline is in nominal dollars. PPI and CPI baskets differ; pass-through is partial and lagged. - Valuation (Shiller CAPE, 2nd-highest in 145 years) and sentiment (Michigan, lowest in 73 years) figures are from the 8 June note above. S&P drawdowns: dot-com -49% (Oct 2002), GFC -57% (Mar 2009), record **7,610 on 2 Jun 2026**. --- *Amar Harolikar · Decision Sciences & Applied AI · [tigzig.com](https://tigzig.com).*