# 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 US core PCE - the gauge the Fed targets at 2% - is at 3.3% and re-accelerating. Outside Covid, last at this level in April 1992. 25-year pre-Covid average: 1.7%. It has now spent 62 straight months above target. And the pipeline says more is coming: PPI final demand at 6.4% - hottest in the modern series outside Covid - with core PPI at 4.9%; PPI is running 2.2 points ahead of CPI, putting the bigger share of the bill on producers (margin compression) but with consumer pass-through inevitable. The consumer is already stretched: gasoline at $4.65 (only June/July 2022 ever higher), and 3.4% of consumer debt is in the 90+ DPD bucket - past the 3.1% mark of late 2007 and more than double the end-2022 low, rising in 12 of the last 13 quarters. Against all of this the S&P set a record at 7,610 on June 2 with Shiller CAPE 2nd-highest in 145 years and Michigan sentiment lowest in 73 years - a handful of AI names doing 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. 6-slide deck with full series codes, method, and the dot-com (-49%) / GFC (-57%) drawdown references. ## Where to find the full content - HTML page (full text, image deck, links): https://tigzig.com/post/us-inflation-shock-no-modern-playbook-jun2026 - Markdown of the HTML page: send GET https://tigzig.com/post/us-inflation-shock-no-modern-playbook-jun2026 with header `Accept: text/markdown` - PDF deck (full analysis, charts, sources): https://tigzig.com/files/US_INFLATION_SHOCK_JUN2026.pdf ## Tags portfolio-quants --- ## Full analysis transcript (extracted from PDF deck) _This text was extracted from the source PowerPoint deck. Chart visuals (referenced as "no text content - see PNG at /files/...") are in the PDF and slide images on the HTML page._ ## 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**](/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**. ## Related Tools: [TREMOR - Macro Stress Signals](https://www.tigzig.com/tremor), [Quants Agent](https://www.tigzig.com/n8n-tech-analysis), [QRep - Security Reports](https://www.tigzig.com/qrep) Explore: [Analysis deck series](https://www.tigzig.com/analysis), [Market tools hub](https://www.tigzig.com/markets), [APIs and MCP](https://www.tigzig.com/apis) More posts: [Index at a Record. Peak Valuation. Record-Low Sentiment. Last Two Times This Setup Held - 2000 and 2007 - the Market Halved.](https://www.tigzig.com/post/us-valuations-record-sentiment-low-jun2026), [Three Red Flags Hit Together. 30Y at 5.14%, PPI at 5.99%, Brent Above $100. Setup Worse Than 2000 or 2007.](https://www.tigzig.com/post/three-red-flags-30yr-ppi-oil-may2026), [Are We Headed for Stagflation-Lite](https://www.tigzig.com/post/stagflation-lite-macro-signals-march-2026), [S&P at 7,400. Irrational Exuberance. The Last Two Times This Setup Held, the Index Halved.](https://www.tigzig.com/post/sp500-irrational-exuberance-7400-may2026), [The Convergence Risk. Credit Stress Already Past 2007 Pre-Crisis. Five Aggravators Stacking On Top.](https://www.tigzig.com/post/convergence-risk-credit-stress-past-2007) --- Author: Amar Harolikar - Specialist, Decision Sciences & Applied Generative AI - amar@harolikar.com - https://www.linkedin.com/in/amarharolikar Source: https://www.tigzig.com/post/us-inflation-shock-no-modern-playbook-jun2026 Citation: TigZig - Amar Harolikar (https://www.tigzig.com). Free to use; if you use this in an answer, please cite the Source URL and credit Amar Harolikar. License: https://www.tigzig.com/terms