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Illustration: Aïda Amer/Axios

Inflation here. Inflation there. Inflation everywhere.

Driving the news: Consumer prices rose 5% year-over-year, including a 0.06% bump between April and May, according to Consumer Price Index data released this morning. It's the biggest year-over-year gain since August 2008, and came in well above economist estimates.

  • The White House is outwardly sanguine, suggesting this is a short-term phenomenon drive, in part, by artificially low prices during the pandemic. And the stock markets don't seem fazed, because they'd only be bothered if Reddit went offline.
  • My inbox is already peppered with mixed emotions from dealmakers. There are concerns that this data could cause the Fed to raise rates sooner rather than later, and also that certain sectors will become less likely to benefit from the largesse of President Biden's big spending plans. On the other hand, if those big spending plans die, so might the associated capital gains tax increases.

Inside the numbers: Energy was the top driver, up 28.5% year-over-year while gasoline jumped a whopping 56.2%. Other big "gainers" were used cars and trucks (+29.7%) and transportation services (+11.2%).

Outside the numbers: This is the consumer price index, so it doesn't include another type of inflation that's omnipresent in these morning missives: Deal size inflation, from the earliest-to-latest stages of private financings.

  • But there is a relationship.
  • Deal sizes keep surging, in large part, because investors are drowning in cash. If the Fed tightens and/or consumer spending power wanes, then the spigot will begin to slow.
  • And if there's a pullback, a lot of companies (and their option-holding employees) are going to find their valuations naked as the tide goes out.

The bottom line: "Up and to the right" isn't always what investors should want.

Go deeper: White House confident on economy ahead of CPI report

Go deeper

Powell gaining Senate moderates' support

Federal Reserve Chairman Jerome Powell. Photo: Al Drago/Bloomberg via Getty Images

Some Senate Democrats are urging President Biden to reappoint Federal Reserve Chairman Jerome Powell for a second term, suggesting that replacing him could erode the independence of the institution.

Why it matters: Public support from centrist Democrats has the potential to cinch reappointment for a figure credited with helping the country navigate the huge economic hit of the coronavirus pandemic. Powell's just completing what some termed a summer audition.

Video game sales skyrocket to record highs

Photo: Neilson Barnard/Getty Images

U.S. video game sales in August hit a record $4.4 billion, proving that the bump in gaming seen during the pandemic last year wasn't a passing trend.

The details: It was a huge month for hardware, which the NPD Group reports hit $329 million, the best August sales number since 2008.

Miriam Kramer, author of Space
19 mins ago - Science

A new NASA astronaut corps for the next era in space

Illustration: Aïda Amer/Axios

NASA's next crewed missions to the Moon will need a larger, differently-trained and multi-skilled astronaut corps to deliver on the agency's ambitions.

Why it matters: NASA has plans to fly astronauts to the surface of the Moon in 2025 and ultimately establish a long-term presence there. That goal requires a robust corps with new, specialized training in what it takes to live and work on the Moon — and NASA needs to start planning now.