Happy Monday, enjoy the cheap-ish gas while it lasts. 

Fighting in Iran throughout the weekend and a new U.S. blockade on the Strait of Hormuz sent oil prices surging today, threatening to push gas above the all-important $4 average. This news comes as economists project elevated inflation for the rest of the year.

In today’s newsletter, we’ll get you up to speed before the new inflation numbers hit this week. Plus: Trump’s “made in USA” phone is here, and you’ll never guess where it’s made. — Tony Wagner, newsletter editor

A whole bunch of inflation data comes out this week, because the Bureau of Labor Statistics puts out its inflation reports in pairs: the consumer price index (CPI), followed by the producer price index (PPI).

The CPI is easy to understand: It measures how much consumers are paying for stuff.

PPI is a little more complex. It’s often described as "inflation at the wholesale level." But that's only part of the story, because it measures inflation in the prices that businesses are charging all buyers — whether it's other businesses or consumers.

Both CPI and PPI are running hotter than the Federal Reserve's 2% target, but producer prices are rising faster than consumer prices — but what happens in the PPI doesn’t always stay in the PPI.

Part of the reason why the consumer and producer price indexes have been moving up at different rates is because they measure different things.

“One of the big things is rent,” said Menzie Chinn, an economics professor at the University of Wisconsin-Madison. “That’s a very big component of the CPI, and that’s not showing up in the PPI.”

Over the last few years, rent growth has been slowing down.

“What’s happening there, which is not at all incorporated in PPI, can drive a wedge between the two series,” Chinn said.

All that weight the consumer price index puts on rent also means CPI isn’t as affected by the cost of fuel.

“Consumers spend a lot of their budget on housing,” said Laura Veldkamp, an economics professor at Columbia Business School. “And housing doesn’t respond so quickly to the price of fuel.”

Veldkamp said the producer price index is much more sensitive to energy costs, because fuel is such an important part of what producers do.

“Even if they’re not buying fuel itself, maybe they bought apples or blueberries, or shirts,” she said. “But they had to be transported to the location where they’ll be sold, and that transportation requires fuel.”

That added pressure puts businesses in a tough spot, according to Matthew Miskin, co-chief investment strategist with Manulife John Hancock Investments.

“They either get lower profit margins, or they have to pass this on to consumers,” Miskin said. “And the question becomes, ‘Can consumers take on that higher price point?’”

Many low-to-middle-income Americans are leaning on credit cards and buy now, pay later loans to cover groceries, according to a new report from the Urban Institute. Of those consumers, more than half are having trouble repaying.

Back around the time President Trump announced his 2025 “Liberation Day” tariffs, his family businesses declared it would build a first-of-its-kind smartphone in the U.S. Well, it took more than a year, and those tariffs have been invalidated by the Supreme Court, but now the T1 phone is here.

It’s gold, naturally, and it’s covered in Trump branding — all its photos even come with a T1 watermark in the corner. But it’s now merely “assembled in the U.S.” and the engineers at iFixIt determined the Trump phone is nearly identical to a two-year-old HTC phone with just some cosmetic differences.