Good morning. Yesterday the US and China announced that they have agreed to a framework to restore a trade-war truce. The details are sparse, but it appears that there will be concessions from China on rare earths and magnets, and the US will soften some technology export controls and visa restrictions. The market did not get excited: the S&P 500 finished the day down 0.3 per cent, and Chinese markets only rose a little. Email us: unhedged@ft.com. 

Inflation 

It made sense that April’s CPI report didn’t show much impact on prices from tariffs — it was the early days of Donald Trump’s tariff war, and it takes time for producers and retailers to make pricing decisions. May’s cooler-than-expected report takes a bit more explaining.

Core inflation, which excludes energy and food, was up 2.8 per cent from the year before, the same as April. But Unhedged’s preferred measure, annualised monthly change in core CPI, came down, after picking up in April: