Core inflation, which excludes volatile food and energy prices, increased 0.2% for the month of June, pushing the year-over-year rate to 2.9%, also matching expectations. Look at us! Matching expectations, boring! But also kinda nice.
(I always try not to assume everyone knows what CPI is, so here you go... The Consumer Price Index (CPI) tracks how much prices are going up or down for everyday items like food, clothing, housing, and other goods and services that people commonly buy. It shows whether things are getting more expensive (inflation) or cheaper (deflation) compared to a previous month or year.)
Although June’s data offered mixed signals about the impact of tariffs on pricing, there were signs of upward pressure in certain categories. Prices for apparel and home furnishings climbed, while vehicle prices declined. In response to the report, President Donald Trump renewed his call for the Federal Reserve to cut interest rates.
Trump vs. Powell
Fed Chair is currently living rent-free in President Trump's head. Criticisms are thrown out almost every day as Trump publicly announced he wants the Fed to cut more rates and bring it down to 1% or less. Cutting rates could happen in September if not this coming July meeting, but I still don't believe 1% or less in a 10-year bond is feasible, at least with Powell. If the next Chairman does exactly what President Trump wants, we could see another frenzy in real estate prices.
Like I said weeks ago, the funkiness is going to stick around for a while! With this administration, be prepared and be flexible. End of the day, as long as you protect your capital, you'll be fine!
