May core CPI printed 0.22% month-over-month Wednesday, May PPI services printed 0.18% Thursday, and Michigan five-to-ten-year inflation expectations held at 4.2% Friday for the fourth consecutive month. Fed-funds futures closed the week with the September 17 cut probability at 88%, up from 82% pre-CPI and 86% at the Thursday close. The June 27 PCE estimate sits at 0.17% core, three basis points under the line the March SEP anchored. The June 18 FOMC is five days from Saturday. Two cuts holding with narrowing dispersion is the most likely shape on the new dot plot.

The three-print sequence

Wednesday, Thursday, and Friday gave the Committee the cleanest three-print inflation sequence since the February 2026 window. Core CPI at 0.22% matched consensus and sat under the 0.25% supercore threshold flagged in Monday’s preview. Core goods ex used vehicles at 0.24% landed inside the 0.20% to 0.30% band. OER at 0.27% sat under the 0.30% threshold. Medical services at 0.31% printed above the threshold, the one CPI line that did not confirm.

The PPI release Thursday cleaned the medical line. Healthcare services at 0.16%, portfolio management fees at 0.04%, and transportation services at 0.22% fed the PCE healthcare estimate to 0.14%, against the CPI medical print of 0.31%. The CPI to PCE wedge (CPI medical at 7.5% of core, PCE medical at 17% of core) landed on the cut-friendly side. The crosswalk maps to 0.17% core PCE for May, three basis points under the 0.20% line the March SEP carried for the May-to-June run.

The Michigan prelim Friday at 10:00 ET held the long-run anchor. Five-to-ten-year expectations at 4.2% matched the May final and held for the fourth straight month at or above 4.0%. One-year expectations ticked to 6.4%, down from the May 6.6% and below the consensus 6.5%. Headline sentiment printed at 54.1, the third consecutive month above the April low of 50.8%. The long-run print at 4.2% confirmed the configuration the May minutes flagged for eight of nineteen participants as the watch line. Neither the upside break above 4.3% nor the cut-friendly downside below 4.0% showed up.

Auction tape

The two Treasury reopens inside the inflation window cleared without forcing a curve reset. The 10-year reopen Wednesday at 1:00 ET cleared at 4.16% with a tail of 0.6 basis points, a bid-to-cover of 2.49, and indirect bidders at 66.4%. The 30-year reopen Thursday at 1:00 ET cleared at 4.71% with a tail of 0.4 basis points, a bid-to-cover of 2.46, and indirect bidders at 67.2%. Indirect bidders above 67% on the long bond signals foreign central banks sourcing duration into the print rather than rotating out.

The week’s curve action shows up in the slope. The 2s10s widened from 47 basis points Tuesday to 53 basis points at the Friday close, the widest reading since the February tariff window. The 5s30s widened from 27 to 32 basis points. The 30-year yield closed at 4.69%, four basis points below the Monday open. A widening front end paired with a stable long end is the configuration the Committee can read as well-anchored expectations rather than a recession trade.

Fed-funds path through the week

September cut probability moved on three steps. Monday opened with September at 78% after the NFIB compensation-plans print Tuesday morning of the prior week. Wednesday post-CPI lifted it to 84% by the New York close. Thursday post-PPI carried it to 86% at the close. Friday post-Michigan added two more points to close the week at 88%.

The second 2026 cut moved from 34% Monday to 41% Friday, the highest reading since the May 7 FOMC. The market is not pricing three cuts with conviction. Three cuts in 2026 sits at 14%, up from 9% Monday. That distribution maps to a dot plot with two cuts as the modal call, one cut as the second mode, and three cuts as a tail that the SEP can show but not center.

The December 2026 fed-funds rate closed the week at 3.78%, down from 3.86% the Friday before. The implied path puts the first cut in September, a hold in November, and a second cut in December, with the December cut sitting at slightly better than coinflip odds.

Five days to the dot plot

The June 18 FOMC meeting decision releases at 2:00 ET with the Summary of Economic Projections simultaneous. The new dot plot is the variable that matters for September pricing more than the meeting statement itself. The March SEP median carried two cuts in 2026 with seven participants at one cut and four at zero cuts. The June dispersion most likely narrows from the upper bound toward the cut-friendly side.

The configuration that breaks two cuts to the downside: a Powell press conference that flags upside inflation risk specifically in the goods-tariff pass-through window, with the SEP showing the median moving to one cut. The Committee has the room to do this and defend it with the 6.4% one-year Michigan print still sitting well above the 2% target. The probability of this outcome sits below the median holding outcome but above the three-cut break to the upside.

The configuration that pushes the median to three cuts: a Powell press conference that frames the 0.17% core PCE estimate as confirming disinflation reaching the goods-and-services mix, with the SEP showing the median dropping. The probability of this outcome sits at roughly the same level as the downside break, slightly under the median holding outcome.

The two-cut median holding with the lower bound shrinking from zero to one and the upper bound steady at three is the most likely shape. That is the shape the cool three-print sequence supports without committing to the cut-friendly side ahead of the June 27 PCE print and the next NFP.

Next week’s calendar

Monday brings Empire State manufacturing at 8:30 ET. Tuesday brings retail sales at 8:30 ET and the FOMC blackout exit at midnight. Wednesday brings the FOMC decision at 2:00 ET with the SEP and the Powell press conference at 2:30 ET. Thursday brings the Philadelphia Fed manufacturing index at 8:30 ET and jobless claims. Friday brings leading economic indicators at 10:00 ET.

The retail sales print Tuesday morning is the consumer-spending pressure point. A control-group print above 0.4% holds the soft-landing read intact. A print below 0.0% opens the question of whether the 2.6% saving rate signaled in the April PCE release is starting to constrain spending rather than fund it. The control-group read maps to the second-quarter GDP nowcast more directly than any other single line on the calendar.

The Powell press conference Wednesday is the second pressure point. The question that matters is whether the chair frames the 0.17% PCE estimate as a confirming read or as a one-month observation that the Committee needs two more prints to validate. The framing decision is the difference between September pricing closing the week at 90% and closing the week at 82%.