Eurodollar University This CPI Report Just Exposed the Fed’s Biggest Problem
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Jul 16, 2025 Despite five months of tariffs, consumer prices remain surprisingly stable. The podcast dives into the minimal impact these tariffs have had on inflation, especially in key sectors like autos. It highlights the Federal Reserve’s puzzling situation with stagnant inflation. A closer look reveals that only select consumer categories see price increases, while overall demand weakens. The troubling trend points toward reduced spending power for consumers and a potential recession looming on the horizon.
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Tariffs Failed to Ignite Inflation
- Five months after tariffs on major trade partners, consumer prices have not surged as expected.
- This highlights a lack of pricing power among businesses despite higher input costs.
Core CPI Rises Less Than Expected
- The core CPI increased less than expected and is rising near a 2% annual rate despite tariffs.
- Shelter prices heavily influence CPI but contain measurement distortions that inflate reported inflation.
Auto Prices Decline Despite Tariffs
- Auto prices declined even with tariffs expected to spike them sharply.
- Consumer rush to beat tariff price hikes created a resale inventory glut, suppressing prices further.