Same data, different conclusions – Inflation commentary 28 May 2026

Same data, different conclusions – Inflation commentary 28 May 2026

Inflation seems to be the topic du joúr. Perhaps surprisingly, however, is the variety of opinions, even on the same day.

Economists, strategists and analysts don’t seem to be able to agree on anything regarding inflation (except for the current number), even on the same day (in this case, today the 28th of May 2026) – even when presented with the same data.  

Here is just a small selection of comments about inflation that arrived in my inbox this morning, and as you will see, facts are open to interpretation.

The United States

1. ‘Inflation is rising and at risk of heading higher yet, thus central bankers are already pivoting to rate hikes; at the margin, policy is becoming less supportive for risk assets.’ – Topdown Charts
2. ‘The “Run It Hot” Mandate: Policymakers must keep the market elevated to prevent economic collapse, choosing inflation over deflation to manage the debt burden…The resulting commodity supercycle is the best vehicle for ordinary investors to capture the wealth effect and outpace structural inflation. “We’re going to grow the economy hot… non-inflationary growth stronger than people expect.”…Supply-side policies combined with A.A. productivity point to strong non-inflationary growth.’ – Metals & Miners
3. ‘Despite the relatively calm price action over the last seven days, Bitcoin’s situation continues to weaken underneath the surface. That’s casting increasing doubt on the recovery trend and raising the risk of another leg lower in the short term. Some of the recent macro developments are not helping either. Treasury yields are moving higher on the back of inflation, and Bitcoin’s own demand indicators continue to soften at the same time.’ – Ecoinometrics
4. ‘Yes, the inflation rate remains above the arbitrary 2 per cent target rate adopted by the Fed in January 2012. And true, Consumer Price Index (CPI) inflation only averaged about 1.8 per cent between 2010 to 2019 during the aftermath of the Great Financial Crisis when real Gross Domestic Product (GDP) growth was fairly disappointing…But in the last almost three years, suddenly anything above a 2 per cent inflation rate is considered a tragedy, an assault on consumers and businesses, and a crisis demanding the entire focus of economic policy officials. Why? Is the ongoing obsession with any inflation above 2 per cent really warranted? And if the inflation bogeyman is chronically thought to be around every corner, how much is this obsession holding back U.S. real economic growth, job creation, economic sentiment, and basically, the American Dream?’ – Jim Paulsen

Australia

1. ‘Inflation, even in core terms, remains above the Reserve Bank of Australia’s (RBA) target band and is likely to remain there for some time. Housing inflation is a key concern, with construction costs and rents likely to remain supported, although our view of a broader housing market slowdown will provide some offset. Over coming months focus will be on: 1) broadening cost-push pressures from higher energy costs; and 2) domestic demand indicators for signs of ability for these costs to be passed through. We expect to see more evidence of weakness in the latter over coming months – a key reason why we expect the RBA to stay on hold at the current cash rate from here.’ – Morgan Stanley
2. ‘The market’s expectations of another interest rate rise from the Reserve Bank of Australia (RBA) this year are starting to fade after a surprisingly cool inflation report reduced the pressure on the central bank to keep tightening monetary policy. Bond traders trimmed their rate rise bets after the monthly consumer price index for April cooled at a faster clip than anticipated to 4.2 per cent. Core inflation still ticked up to 3.4 per cent, which is the highest since late 2024 and well outside the RBA’s target. “This will be a big relief for the Reserve Bank for sure, they will receive this data print with open arms,” said Andrew Lilley, chief rates strategist at Barrenjoey. Lilley noted a surprising decline in domestic inflationary pressures that dominated much of last year. He said that while costs remained undeniably high in sectors such as fuel, electricity and new housing, market services inflation over the past three months had actually fallen below the RBA’s 2 per cent to 3 per cent target band. “It’s going to make the RBA less concerned about the breadth of inflation pressures for the economy.”’ – The Australian Financial Review
3. ‘According to Saraha Hunter, assistant governor of the Reserve Bank of Australia, the RBA anticipates that inflation will rise more than previously anticipated due to rising oil process brought on by the Middle East crisis. Hunter clarified in a speech and interview that the RBA is concentrating on three factors.’  – MacroBusiness

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Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.

Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances. 

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.