The May NFIB Small Business Optimism Index printed at 94.4 Tuesday morning, three tenths above April’s 94.1 and the twenty-first consecutive month below the 52-year average of 98.0. The compensation-plans subindex eased from 18 to 17, the cut-friendly side of the 16-to-20 band laid out in Monday’s preview. Cost of inputs held the lead over quality of labor at 24 to 21 as the single most important problem, a second consecutive month with inputs on top.

The 3-year Treasury auction cleared at 1:00 ET with a high yield of 3.94%, tailing the 1:00 ET when-issued by 0.8 basis points. The bid-to-cover came in at 2.51 against the six-auction average of 2.55. Indirect bidders took 65.4% versus the recent average of 67.1%. The tail and the soft indirect bid are the cleanest market-side signals that the curve is sitting heavier on Wednesday’s CPI than the post-NFP price action suggested. The 10-year reopen at 1:00 ET Wednesday sits inside the inflation-day window for the first time since the November 2025 sequence.

Overnight repricing

Fed-funds futures pulled the September 17 cut probability from 79% at the Tuesday close to 82% in the overnight tape. The second 2026 cut, which sat at 32% before NFIB, moved to 35%. The 10-year yield fell 3 basis points to 4.18% on the Tokyo open and held there through the London open. The 2-year sat at 3.71%, flat overnight. The 2s10s widened to 47 basis points, the widest since the early-tariff window in February.

The Dollar Index sits at 103.4, down 0.2 overnight. WTI crude is at 62.8, flat. Gold is at 2,894, up 6 on a quiet overnight tape ahead of the print.

What the prints set up for 8:30 ET

The NFIB easing on compensation plans corroborates Friday’s 0.2% average hourly earnings print. Two of the three private wage signals on the May data calendar (NFP wages, NFIB comp plans) have now landed on the cut-friendly side. The third (Q1 ECI final on June 26) sits past the FOMC. That puts the wage story in the column the Committee can carry into the June 18 decision without needing CPI to confirm.

CPI does the goods and shelter work the wage data cannot. The four lines from Monday’s preview hold: supercore at 0.25% or below, OER at 0.30% or below, core goods ex used vehicles between 0.20% and 0.30%, and medical services flat or cooler with PPI confirming Thursday. The overnight pricing has already moved 3 percentage points of September cut probability on NFIB and the 3-year tail. A clean cut-friendly CPI configuration takes September toward 88% and pulls the second 2026 cut toward 45%. A cut-unfriendly configuration resets September back to 70% and pulls the second-cut pricing under 25%.

The headline year-over-year consensus is 3.7% against April’s 3.8%. The core consensus is 0.22% month-over-month against April’s 0.27%. The wires lead with those two numbers. The four lines decide what the Committee does with them.