Wall Street Breakfast Stagflation alarms could sound this week
Sep 7, 2025
This week’s focus is on inflation data, with anticipation surrounding the CPI report and its impact on recession fears. Kroger's earnings are expected to benefit from a consumer shift towards value shopping. OpenAI significantly increases its spending outlook, hinting at a strong push in the AI sector. The discussion also covers labor market trends and projections that could influence interest rates and earnings as consumer behavior evolves.
AI Snips
Chapters
Transcript
Episode notes
CPI Could Flip Fed Bets Quickly
- The CPI report will shift Fed focus from employment to price stability and could change policy bets quickly.
- A hot CPI could revive stagflation fears by combining rising prices with weakening labor demand.
Core Inflation May Stay Elevated Into Spring
- Economists expect August headline CPI +0.3% monthly and core CPI +0.3%, keeping core at ~3.1% year-on-year.
- Wells Fargo expects core inflation to run near a 3% annualized pace for months before easing next spring.
Fed Cut Odds Depend On CPI Print
- Markets priced a 25bp Fed cut for Sept. 17, but a tame CPI would raise odds of a larger 50bp move.
- A hot CPI could push the Fed back toward hawkishness and heighten stagflation risks, says Freya Beamish.