The equity market went on a wild ride Thursday after the headline CPI reading was weaker than expected. The news sent a wave of relief through the market as investors looked for clues to the Fed's next move. The relief was short-lived because the data, while cooler than expected, is an acceleration from the previous month, and the core figures are still hot. In this scenario, the FOMC is still expected to increase rates later this year.

The news helped send the oil price down more than 1%. This is good news for the inflation picture, but the downturn may not last long. OPEC+ has the market tilted firmly in favor of higher prices, and that will only change with demand destruction. As it is, demand for oil remains high and underpinned by a healthy labor market. If oil continues to trend higher as it has the last 2 months, inflation will spike again later this year.