Morning Brew Daily Inflation Hits 3-Year High & Harvard Cracks Down on A Grades
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May 13, 2026 They unpack April’s surge in CPI and how the Iran war pushed energy and core prices to a three-year high. They trace inflation through food costs, supply chains, and wages. A Japanese snack maker strips color from packaging due to ink shortages. Corporate drama unfolds as a high-profile tech trial heats up. Harvard debates capping A grades to fight grade inflation, and a takeover bid gets rebuffed.
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War-Driven Energy Shock Pushed Inflation Higher
- Inflation jumped to 3.8% in April, the highest in three years driven largely by energy price spikes after the Iran war.
- Core CPI rose 2.8% (largest since September) and airfares climbed 21%, showing fuel shocks filtering across sectors.
Tomatoes Show How Multiple Inputs Amplify Inflation
- Inflation's impact spreads through supply chains so a single shock (like fuel) raises many everyday prices.
- Neil used tomatoes: tariffs, fertilizer, diesel, packaging, and transport all combined to push tomato prices ~30% year-over-year.
Inflation Erased Recent Wage Gains
- Wage gains (3.6%) were outpaced by inflation (3.8%), marking the first time in three years real earnings fell.
- Food up 3.2% and coffee +19% year-over-year, while cattle herd lows raised beef prices independently of the war.