3 Things You Need to Know This Week | US Inflation, US Q1 GDP, Graduation Season (May 25, 2026)
This Fisher Investments video covers three key topics for the week of May 25, 2026: upcoming US PCE inflation data, a Q1 GDP second estimate release, and financial planning considerations tied to graduation season. Fisher Investments argues inflation fears are likely overstated and that forward-looking indicators suggest continued economic growth.
Summary
The episode opens by previewing Thursday's PCE inflation report, the Federal Reserve's preferred inflation gauge. Heading into the release, CPI data showed headline inflation at 3.3% year-over-year in March and 3.8% in April, while March PCE came in at 3.5%, the highest reading since May 2023. Despite growing fears of a new wave of runaway inflation — partly driven by higher energy prices tied to Middle East conflict — Fisher Investments argues a larger or prolonged inflation spike is unlikely. They point to moderate money supply growth as a key reason, and note that higher oil prices have not yet flowed through into other goods categories. As evidence, they cite a 0.7% price decline in chemical-intensive household cleaning products. They argue that businesses can only pass along higher costs when demand is strong enough, which typically requires broad money supply acceleration.
The second segment covers the Bureau of Economic Analysis's second estimate of Q1 2026 GDP, also due Thursday. The initial estimate showed growth accelerating from 0.5% annualized in Q4 2025 to 2.0% in Q1 2026. While recent quarters have seen initial GDP readings revised downward, Fisher Investments argues the more important point is that GDP is a backward-looking measure, and markets are already pricing in past data. They emphasize that forward-looking indicators — including a steepening US yield curve and positive purchasing manager indexes — suggest continued economic growth ahead.
The third segment uses graduation season as a prompt for estate and financial planning. Fisher Investments encourages families with accumulated wealth to review how they are preparing for future costs like education, and to ensure legal and financial structures are properly aligned. They recommend coordinating wills, portfolios, and estate plans with appropriate professionals to support both near-term milestones and long-term legacy goals.
Key Insights
- Fisher Investments argues that moderate money supply growth makes a larger or prolonged inflation spike unlikely, suggesting inflation may ultimately turn out better than widely perceived — creating an opportunity for positive market surprise.
- Fisher Investments contends that higher oil prices have not yet flowed through to other goods categories, citing a 0.7% price decline in chemical-intensive household cleaning products as evidence against the 'delayed spread' inflation narrative.
- Fisher Investments asserts that businesses can only successfully pass along higher input costs when demand is strong enough to absorb them, and that this generally requires a broad acceleration in money supply growth.
- Fisher Investments argues that GDP is a backward-looking measure already reflected in share prices, and that forward-looking indicators like a steepening US yield curve and positive purchasing manager indexes matter more for stocks today.
- The initial Q1 2026 GDP estimate showed US economic growth accelerating from 0.5% annualized in Q4 2025 to 2.0% in Q1 2026, though Fisher Investments notes recent quarters have seen initial readings subsequently revised downward.
Topics
Transcript
[0:05] Hello and welcome to Three Things You Need to Know this week, our regular series designed to help you sift through the noise across financial media, and understand what really matters for markets. To stay up to date with our latest market insights, subscribe to our YouTube channel or visit Fisher investments.com. And with that, here are three things you need to know this week. First, US PCE Inflation. On Thursday, we will get the latest reading [0:37] of the Personal Consumption Expenditures Index or PCE. This is the Federal Reserve's preferred inflation gauge. That report should add another useful data point on inflation and the state of the US economy. Here's where things stand going into Thursday's release:…
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