Fed’s Favored Inflation Gauge Likely Stalled
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Trump, Jerome Powell and Fed
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What is clear is that the current 4.33% median Fed funds target rate remains well above the inflation trend. Even after the acceleration in consumer prices in June, the policy rate is roughly 1.4 percentage points above headline CPI’s one-year change – close to the biggest gap post-pandemic.
The Bureau of Labor Statistics reported that the consumer price index (CPI), a popular inflation gauge, increased in June to 2.7% on an annual basis as prices rose for consumers.
Key Takeaways Inflation rose in June, moving further from the Federal Reserve's goal of 2% each year.This flare of inflation will likely discourage the Fed from cutting its influential interest rate later this month.
CPI data reveals inflation trends, with core at 2.9%. Service sector inflation rises, suggesting the Fed may hold rates steady through year-end. Read more here.
A new report shows inflation has picked up and analysts believe the prices of many goods increased, in part, because of President Trump’s tariffs. It will play into decisions by the Federal Reserve about when and whether to cut interest rates and comes as the president and his team have ramped up their pressure campaign on Fed Chair Jerome Powell.
The Federal Reserve will likely be able to start cutting short-term borrowing costs by September, traders continued to bet on Tuesday, after a government report showed a widely expected increase in consumer prices last month.
Where’s all the inflation from the Trump trade wars? So far, the evidence really hasn’t shown up — but many economists say it’s coming soon, perhaps as soon as this week.
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Gary Cohn, IBM vice chairman and former National Economic Council Director under President Trump, joins 'Squawk Box' to discuss the state of the economy, June's CPI data, President Trump's tariff agenda,
Inflation is up, stocks are down, and more tariffs are on their way. Trump wants interest rates to come down but the direction of travel is making it less likely that the Fed will deliver the cuts he wants. It’s not clear whether Trump can extract himself from the policy cycle he has created.