If you’re in Minneapolis or Honolulu, congrats on living in the first major US cities to return to the Fed’s target of 2% inflation.

If you’re dealing with $7 orange juice like the rest of us, there’s still reason to be cautiously optimistic. Yesterday, the Bureau of Labor Statistics released the Consumer Price Index (CPI) report for May, and the closely watched measure of inflation showed that consumer prices rose 4% annually last month, less than half of the rate of peak inflation in June 2022.

While prices are still rising briskly in certain sectors of the economy, the overall report was a hopeful sign that our long inflation horror story could be entering its final chapters.

4 key takeaways from the report

1. Energy is doing a lot of the heavy lifting. Cheaper energy played a major role in pulling inflation down to 4% last month from 4.9% in April, per Axios. Gas prices plunged almost 20% from last year, when Russia’s invasion of Ukraine sent fuel costs to the moon, while broader energy prices fell nearly 12%.

2. “Revenge spending” is down. Once pandemic lockdowns lifted, Americans splurged on vacations, leisure, and recreation (new pickleball paddles!) in what economists dubbed “revenge spending.” Now that everyone has taken their weeklong trip to Italy, there are signs that revenge spending is waning: Airfare prices dropped 13% annually in May and, according to the US Travel Association, hotel demand is below 2019 levels. Bad for your Insta, but good for inflation.

3. Food prices are up. The cost of food ticked up 0.2% in May from April after staying flat in the previous two months, showing how inflation has persisted on grocery store shelves. But not all aisles are created equal—the price of eggs dropped nearly 14% from April (the biggest one-month drop since 1951), while fruit and veggie prices rose 1.3%.

4. More than anything else, rent is propping up inflation. Shelter costs are the largest category in the CPI report, and they’re still on the upward march, climbing 8.7% from a year earlier. The good news: Economists say this government data doesn’t reflect on-the-ground information, such as reports of softening rent by Zillow and Apartment List. Shelter costs in the CPI are expected to decline during the second half of the year.

Looking ahead…later today, Fed Chair Jerome Powell is expected to announce a pause in interest rate hikes after 10 consecutive increases. And, if inflation continues to drop like it did last month, he may not start up again anytime soon, analysts told Bloomberg.—CC

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Donald Trump was arraigned in a Miami courthouse. The former president turned himself in to authorities yesterday and pled not guilty to charges that he illegally hoarded classified documents after he left the White House and blocked the government’s attempts to get them back. The indictment is the first time that a former president has been charged with federal crimes and marks the second time that Trump has been charged with crimes this year. Still the frontrunner for the GOP presidential nomination, Trump later proclaimed his innocence in a speech from his golf course in New Jersey.

The hits keep coming to SF real estate: The owners of the Westfield San Francisco Centre mall in one of the city’s main tourist areas handed over the keys to lenders with $558 million in outstanding mortgage debt. Westfield said its management of the property had become untenable because of “challenging operating conditions” in downtown SF, including lower foot traffic and sales declines. This was the same mall that Nordstrom packed up and left one month ago over similar challenges.

A baby AI startup lands a historic investment. Mistral AI, a French startup founded by former Meta and Google AI researchers, raised ~$113 million in Europe’s biggest seed round ever, the FT reported. But, wait for it…the startup is four weeks old and its first employees began working just a few days ago. You may call it another sign that AI is a bubble waiting to pop, but investors don’t want to risk sitting on the sidelines: Even amid a broader investment drought, AI-related startups in the US have landed $25 billion in funding so far this year.

Instant Pot’s once-grand dreams of taking over your kitchen came out underdone. Its parent company, Instant Brands, filed for Chapter 11 bankruptcy Monday to get its battered finances in order.

Not long ago, Instant Pot devotees were compared to a cult. The easy-to-use pressure cooker exploded in popularity in 2016, speeding up stews and dominating cooking blogs pitching “65 easy Instant Pot recipes for quick weeknight dinners.” The Swiss Army knife of kitchen appliances regularly became a top seller on Amazon’s Prime Days.

In 2019, private equity firm Cornell Capital scooped up Instant Pot and plotted to grow its reach faster than the countertop hog could finish your carnitas.

But fly too close to the broiler, and you’re going to get burnt.

• Hungry for expansion, Cornell pushed Instant Brands to release new gadgets, like air fryers and an air purifier. Those flopped.
• At the same time, sales of Instant Pot and its fellow multicookers fell by half from 2020 to 2022, according to NPD Group.

What happened? You can blame the device’s flameout on Covid-era supply chain snags, lower demand for lightning-quick meals as more people work from home, or the fact that “no product stays at a phenom level forever,” according to Instant Brands CEO Ben Gadbois.

Looking ahead...could air fryers be the next kitchen disruptor to stall out? Based on similarly cooling sales, possibly.—MM

A new Beatles track will drop this year with artificial intelligence joining the Fab Four on Abbey Road.

Yesterday, Paul McCartney told the BBC that AI helped him use a demo recording of John Lennon singing an unpublished song to create a last hurrah from the iconic band, which broke up more than 50 years ago.

Sir Paul did not reveal the name of the soon-to-be-released song, but fans are speculating that it’ll be “Now And Then,” one of the songs that Lennon recorded in the late ’70s on a cassette labeled “For Paul” that Yoko Ono gave to McCartney after her husband’s death.

So, how does this tech bring Lennon’s voice back to life?

• McCartney said the AI was trained to recognize his bandmate’s voice and then used to separate it from background noise and instruments.
• The method was pioneered during the production of Peter Jackson’s 2021 Get Back docuseries, which chronicles the making of the final Beatles album, Let It Be, through the use of archival footage and audio.

The same AI trick has already made some Beatlemaniacs bawl their eyes out: McCartney performed a “virtual duet” with his late pal Lennon during his US tour last summer.—SK

Stat: There are only a few things that can get people to stop thinking about sex, and one of them is sports. During the Champions League final between Manchester City and Inter Milan on Saturday, traffic on Pornhub plunged 32% below average in Italy (then surged 17% in the hours after Inter lost), according to Pornhub Insights. The adult content site typically sees lower traffic during other major events, such as Apple’s product releases and the Super Bowl. Last year, website traffic in Philly plunged 35% below average when the Eagles played in the big game.

Quote: “The job is done, we can go home now.”

Nikola Jokić just delivered another blow to #hustleculture. In postgame interviews following his first NBA championship, all the Serbian superstar could talk about was clocking out of work. He even appeared frustrated that the championship parade would be held on Thursday, delaying him from going home. Jokić is destined to become the second NBA great to go viral on LinkedIn after Giannis Antetokounmpo argued earlier this spring that “there’s no failure in sports.”

Read: The NCAA has a “hot girl” problem. (The Free Press)

Buy a vowel: With Pat Sajack leaving as host of Wheel of Fortune, here are three of our favorite Wheel clips.

Your eyes will thank you: This is a huge collection of optical illusions and other visual phenomena.

McDonald’s or Chick-fil-A? One TikToker with an extensive food vocabulary gives a review.

The Passport Index: Explore the passports of the world and see which ones give their holders the most mobility.

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Word Search: Is there anything more “summer” than licking an ice cream bar in the shape of Shrek? Don’t think so. Play our ice-cream-bar Word Search here.

Wheel of Fortune, sans the wheel

Can you solve this Wheel of Fortune puzzle? Vowels are not for sale.

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