The US Bureau of Labor Statistics released June CPI numbers today, revealing an inline report for the month at 0.3%. The annualized rate stands at 2.7% – substantially higher than the US Federal Reserve’s target rate of 2%.
At the same time, real average hourly earnings decreased slightly in June by 0.1%.
Markets took the news with ease as it delivered no surprises.
At the same time, the conventional wisdom on rate cuts held steady with the Fed expected to pass on a reduction this month and potentially reduce rates this fall.
President Trump has pressured the Fed to cut rates, lambasting Federal Reserve Chairman Jerome Powell as “too slow.” At the same time, the volatile tariff environment has made it difficult for the Fed to model out future monetary policy. The unknown creates risk, and FOMC members are leery about moving too fast and reigniting inflation.
