On Investing

Inflation Edges Up: Analyzing the Fed's Next Move

10 snips
Aug 15, 2025
Kathy Jones and Liz Ann Sonders dissect the latest Consumer Price Index data, raising concerns about inflation and the threat of stagflation. They analyze the Federal Reserve’s tricky position on interest rate cuts while navigating a stable labor market. The duo emphasizes the importance of diversification in investments, especially with international assets. They also preview crucial upcoming economic indicators that could shape market trends, alongside a fascinating debate on differing views regarding impending rate cuts within the Fed.
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INSIGHT

Inflation Is Reaccelerating

  • CPI has flattened after falling from pandemic peaks and is now edging back up, with headline 2.7% and core 3.0% year-over-year.
  • Core services are rising faster than goods, signaling persistent underlying inflation pressures.
INSIGHT

Goods Inflation Rebounded Strongly

  • Core goods moved from about -2% late last year to roughly 1.2% now, a more than three percentage point swing.
  • Some of that owes to comparisons and tariff-related jumps in May and June, not just fresh demand.
INSIGHT

50bp Cut Faces High Bar

  • A 50 basis-point Fed cut would require a notably worse labor market; current unemployment around 4.1% argues against that.
  • With inflation turning higher, the Fed faces a policy conundrum between cutting and staying restrictive.
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