CPI Recap: Inflation Won’t Die, Powell Won’t Blink, and Trump Won’t Quit All Caps…

Well, I’d love to tell you inflation’s chilling out like it finally discovered weed gummies. But nope. It’s apparently back, reminding everyone it’s still here and still kind of an a*hole. In short, June CPI clocked in at 2.7% year-over-year, up from 2.4% in May. Core CPI… the part excluding food and energy, aka the Fed’s favorite measure… hit 2.9%. Both in line with expectations, but still above Jerome Powell’s dream scenario where prices rise exactly 2% a year and nobody ever yells at him on Truth Social about it. 

(Source: Giphy) 

Meaning, the reports a mess of mixed signals. New and used car prices dipped 0.3% and 0.7% respectively, which is good news for anyone who wants to buy a Corolla without selling a kidney. Lodging away from home was also down almost 3%. As for other stuff, they won’t stop climbing. Apparel prices rose 0.4%. Home furnishings popped 1.0%. And shelter’s still the biggest driver of CPI overall, up 3.8% year-over-year. With that said, Trump’s tariffs are finally starting to creep into prices… especially clothes, furniture, and appliances. But it’s still not definitive enough for economists to say: “Aha! Tariffs did this.” 

(Source: CNBC) 

Naturally, Donny Politics took to Truth Social the minute the CPI dropped, screaming about how “Consumer Prices LOW. Bring down the Fed Rate, NOW!!!” He later demanded a three-point rate cut. To which, I say, bring it on (I’d like to experience the thrill of refinancing at least once in my life). But alas, Wall Street, thankfully isn’t shatting bricks (yet).  The S&P 500 wobbled but didn’t crater. Treasury yields drifted a bit lower, signaling markets are starting to accept that the Fed’s likely holding rates steady at the July meeting. Futures markets now put the odds of a July rate cut at less than 3%, with September still in play for a quarter-point trim if inflation cooperates.

(Source: Giphy) 

Translation: inflation is lower than last year’s fiery peak, but it’s sticky enough to keep Powell and the Fed terrified of cutting too early. They remember 2021 and 2022. They’re not about to let core CPI stay near 3% and then explain to Congress why eggs cost more than a Brazzers subscription (not that I would know). Plus, even wages can’t catch a break. Real earnings fell 0.1% for June. Year-over-year, they’re up 1%, but that’s not exactly sending anyone on a trip to Cabo.

In the end, this report keeps the Fed locked in a defensive crouch (and solidifies J-Powws Buzz Killington stance). Rates aren’t coming down in July, and Powell’s not giving Trump his headline. With that said, inflation’s not spiraling out of control… but it’s nowhere near dead either. So given all of this, as Ja Rule says “it’s murda”... and yet, it’s not. Sure our wallets are getting a bit whacked, but let’s all be honest, it could be worse. 

(Source: Giphy) 

Meaning, for now, breathe easy and relish in the fact that the markets aren’t collectively nuking everyone’s portfolios right now (knock on wood). Of course, things could change, but right now, I’m just going to leave all the doomsday worrying to Jamie Dimon. Until next time, friends…  

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.