It was recently Friday the 13th, but instead of trying to scare you, we have positive economic data to make you happy. We also pay tribute to one of the greatest songwriters of all time, Brian Wilson, and celebrate all the fathers out there and those that are no longer with us.

Consumer Prices Rose Just 0.1% in May

Now there’s a happy headline! After all the talk about how tariffs would stoke inflation—a theory that I strongly disagree with—the rate of inflation keeps coming down. In fact, May marks the fourth straight month that consumer prices rose less than expected. Over the past year, prices are up 2.4%, which is close to the Fed’s 2% target.

Core inflation—which excludes food and energy prices—also rose just 0.1% last month and was below the 0.3% forecast. Core CPI is up 2.8% from May 2024, which was also lower than forecasted. The annual rate of core inflation is running higher than the overall number because of energy prices, which are down 3.5% from a year ago.

With all the panic that tariffs would be pushing prices higher, there were some interesting declines in prices for certain items in May. Apparel prices fell 0.4% last month, and new car prices were 0.3% lower. I know that some of the tariffs have been put on pause, but the ones on auto, steel, aluminum, and the 10% reciprocal tariffs are still in place. Don’t worry, I will wait a bit longer for my “I told you so” speech.

The bottom line is that any way you look at inflation—CPI, PPI, PCE—the rate of inflation is coming down. Remember that when the rate of inflation is going down—which is what we have now—it’s called disinflation, and when prices are going down—something we dream about every night—that’s called deflation.

What does this mean for the Fed? Markets are betting they start cutting rates in September, but it seems like that will only happen if all the tariff negotiations are finished by then. I know you’re also wondering when mortgage rates will start falling, and that’s a bit tougher to answer. Normally when inflation is coming down you expect mortgage rates to come down as well. But with the trade war and huge federal deficits continuing to rattle markets, 10-year treasuries have stayed elevated. That’s a fancy way of saying I’m not sure when rates will come down, but let’s remain hopeful for sooner rather than later.

Brian Wilson 1942-2025

As some of you already know, in my free time I am a gigging musician. That said, you don’t have to be a musician to appreciate the great music written by Brian Wilson. Songs like “California Girls”, “Good Vibrations”, “I Get Around” and dozens more are just as popular today as when they were released. I have fond memories of going to Beach Boys concerts with my dad and son, and all of us singing along to every song. Anytime you get three generations at a concert you have written some amazing music.

While it’s impressive when so many Heyms like your music, if you can give the Beatles a run for their money, that says it all. Paul McCartney said “God Only Knows” is the greatest song ever written, and that the Pet Sounds album pushed the Beatles to write better music. What better complement can you get than that?

While he certainly gets the credit he deserves for his songwriting, I’m not sure his voice is truly appreciated. Just listen to “Don’t Worry Baby”, “Wouldn’t It Be Nice”, or “I Just Wasn’t Made for These Times”, and you will see how great his voice was.

Thank you, Brian, for all the great music, and thanks to you, summer never really ends.

I would also like to acknowledge the death of Sly Stone this week. He gave us some amazing songs like “Dance to the Music”, “Everyday People”, “Family Affair”, and the song that was number one in the U.S. the day I was born, "Thank You (Falettinme Be Mice Elf Agin)". What a funky tune!

Thank you Sly for giving us great tunes, if only I was a better dancer.

Happy Father's Day

Sorry to make a long column even longer, but I must take a minute to pay tribute to all the dads out there and those that have passed. I have written extensively about my dad—who passed away from Alzheimer's in 2021—in this column, so I’m not sure there’s anything else to add. I’ll just reiterate how lucky I was to have such a great dad, and that I hope I am half the father he was.

Here is a link to the Horace Silver classic “Song for My Father”, a tune I loved playing for my dad. Every time I play it now, I remember him and all he did for his four sons and eight grandchildren.