Wall Street Is Bussin’ As CPI Whisper-Cuts the Fed Hair (And Suddenly Everyone Is a Dove Again)...

So you’re telling me there’s a chance… 

Google “perfect inflation number” and you’ll get a mess of think pieces, Fed minutes, and maybe an economist crying into his keyboard. But Tuesday’s CPI print? It was basically a whisper in Jerome Powell’s ear: cut them rates, daddy.

(Source: Giphy) 

The S&P 500 and Nasdaq Composite both closed at record highs after July CPI came in a tenth cooler than expected… 2.7% vs. the 2.8% economists had penciled in. Core CPI (the one that includes no food, no energy, and no fun) was a hair hotter at 3.1% YoY, but apparently nobody cares because traders now see a 94% chance of a September rate cut. That’s up from 85%, with October and December cuts also creeping higher on the odds board. Translation: This is the part of the movie where everyone decides J-Poww is not, in fact, getting fired. 

(Source: CNBC) 

As for the bullish spin, it’s simple: rates down, earnings up, and a stock market that refuses to acknowledge gravity. “It’s a bit of Goldilocks right now,” one strategist said. Meanwhile, President Trump’s been quick to spike the football on Truth Social, using the tame headline number to tell DJ- Sol and Goldman Sachs (basically anyone else who doubted him) that tariffs haven’t tanked the consumer. Whether you buy that logic or not, the market clearly did.

But dig under the hood, and the inflation report wasn’t that clean. Core services prices, the Fed’s pet obsession, had their biggest monthly gain in six months. Airline fares spiked 4%, dental services jumped a record 2.6% (apparently everyone decided to fix their teeth last month), and tariffs are still quietly nudging up prices on furniture, tires, and anything else you can’t ship in an envelope.

(Source: Giphy)

Then there’s the weird subplot: The Bureau of Labor Statistics is running with skeleton crews after budget cuts, firing its commissioner, and filling 32% of CPI with “imputed” data…basically, educated guesswork from neighboring zip codes. So while the market’s trading like the Fed just got a green light, the numbers may be more “choose your own adventure” than holy scripture.

So yeah…on paper, it’s rate-cut season. In reality, there’s just enough messy detail for the Fed hawks to keep squawking until the August jobs report. For now though, the market’s betting the house on Powell going soft next month. And in this market, betting the house has been working just fine (not financial advice). Meaning, keep your head on the swivel and stay away from the Prediction markets you degenerates. Until next time, friends… 

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