Inflation Headlines Are Misleading Investors | S2 E055 | 06-27-25
Today’s market headlines about inflation being subdued don’t tell the full story. Core PCE, the Fed’s preferred inflation gauge, came in hotter than expected at 2.7% year-over-year, moving further from the Fed’s target.
• Core PCE rose to 2.7% year-over-year, above expectations of 2.6% and higher than last month’s 2.5%
• Inflation impacts from tariffs haven’t shown up in the data yet but likely will in coming months
• Fed is staying on hold until they get clarity on tariffs and what companies are passing on to consumers
• Today’s market rally likely reflects optimism about potential trade deals rather than inflation data
• Personal spending and income fell dramatically while consumer confidence rose
• Consumer inflation expectations were better than expected but remain historically elevated
• Next week brings major economic data including ISM manufacturing and the jobs report
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