Why PCE Inflation April 2026 Still Matters Despite the Iran Deal
PCE inflation April 2026 print drops Thursday morning and the Iran deal that broke over the weekend doesn’t change what that number is going to say. Trump posted Saturday that a deal with Iran is “largely negotiated.” Hormuz reopens. Details coming shortly. By Sunday morning, 33 ships including oil tankers had already passed through the strait with Iran’s permission. Rubio, characteristically, added “significant but not final progress” which is either genuine diplomatic caution or the usual gap between what Trump announces and what’s actually signed.
There have been at least six “deal is close” headlines since February. This one feels different in texture. The regional call Saturday included Saudi Arabia, UAE, Qatar, Pakistan, Turkey, Egypt, Jordan, Bahrain, and Netanyahu — all of them, in one afternoon, focused on finalizing terms. Iran’s foreign ministry confirmed a framework MOU exists as a first phase, with broader talks in 30-60 days. And 240 ships were sitting outside the strait waiting for permission. When ships start moving, it’s not just a tweet.
So here’s what actually happens if this holds.
Oil falls, fast. WTI closed Friday at $98. Goldman had Brent at $80 by Q4 even without a deal. A genuine Hormuz reopening- 20% of global oil supply coming back online could get you there before summer. Tuesday morning, when US markets open after Memorial Day, the oil futures reaction will tell you immediately whether traders believe it. If WTI gaps below $90, the market believes it. If it opens at $95 and drifts, skepticism is still running the show.
Here’s the complication nobody wants to sit with. Even if oil drops $20 this week, Thursday’s PCE print is already baked. April data. The first full month to reflect peak energy impact. Headline PCE expected around 3.9% up from 3.5% in March. Core likely at 0.4% month-over-month, which annualizes above 4.5%. The Fed’s target is 2%.
That data doesn’t care about Saturday’s announcement.
And the second-order inflation effects- the ones that came from $4.50 gasoline feeding into trucking costs, airline fares, manufacturing inputs, those don’t reverse the day after oil falls either. Companies that repriced higher over the past sixty days don’t automatically reprice lower. They keep the margin when they can. Which means May and June PCE prints will be the first real test of whether the inflation was mostly energy or whether it spread.
This puts Kevin Warsh in an almost impossible position for June 16. He walks into his first meeting as Fed chair with April PCE running hot, a FOMC that voted 8-4 at the last meeting with four dissenters wanting to strip the easing bias entirely, a bond market pricing a December rate hike at 60% and now a potential oil price collapse that could mechanically pull headline inflation lower by August. The hawks look right on core. The doves are about to look right on headline. Warsh has to thread that needle in his very first press conference.
My read: the easing bias still comes out of the June statement. Core is too hot and Warsh needs to establish inflation-fighting credibility immediately- that’s the whole point of his appointment. But the rate hike pricing for December probably fades if oil cooperates through summer. Watch the 10-year yield’s reaction to Tuesday’s oil open. That spread between where bonds price inflation and where equities price growth is the most important number in markets right now. Not the S&P level. Not the VIX.
The thing about Nvidia nobody wants to say.
Beat for the fourth straight quarter. Stock fell for the fourth straight quarter. Revenue $81.6 billion, up 85% year-over-year, net income $58.3 billion against a $42.9 billion estimate. Jensen Huang literally said, “demand has gone parabolic.”
The stock fell.
At some point the pattern is the message. When you’re priced for miracles and deliver miracles and the stock still goes down, the multiple is the problem, not the business. The buy-side whisper for Q2 guidance was above what management gave. So, it fell. I’m not shorting Nvidia I’m not that brave or that stupid but I’m also not adding here. The business is extraordinary. The valuation math, at current yields, is not.
Meanwhile Arm went up 50% in a week. Fifty percent. It’s now up 170% year to date. Insiders sold millions of shares into the rally. File that wherever you file things.
SpaceX. Briefly.
SpaceX filed its S-1 on Wednesday. Targeting $75 billion raise, $1.75-2 trillion valuation the largest IPO in history by a distance. The Starlink business threw off $2.1 billion in adjusted EBITDA in Q1 alone. Anthropic is paying SpaceX $1.25 billion per month for compute through 2029.
Per month. I keep rereading that line.
Roadshow starts June 8. More then.