June CPI sparks debate over the Fed's next move on interest rates

00:00 Brooke

were so way off from that 2% target that the Fed’s coming from. even if this CPI print did come in slightly uh lower or rather an increase that was lower than what expected. We also saw the first monthly decrease since about 2020. And so reading through some of the the rhetoric there, I mean, this is what we’ve been trying to get towards, but I think the fact that this is a look back is very significa signified here if that’s even a word to say.

00:18 Speaker B

It is a word. I mean Whatever you say Brooke, it’s a word. I’m going with it.

00:22 Brooke

When you think about the fact that, you know, this obviously is a look back. yesterday, we saw the highest jump in international uh Brent that we’ve seen since 2020. I mean, how much significance does this report hold? I think that’s a big question mark, especially ahead of Kevin Warsh uh that that uh where we’re hear from him today.

00:39 Speaker B

Tom, I thought Kevin Warsh was going to be a dove. I thought he was going to give the president what he wanted. Now we have him out here talking about potential Fed rate hikes.

00:48 Tom

It it’s definitely been a surprise. It’s he has definitely come out more hawkish than I think people have thought in his tone. But, you know, we also have to focus on what the Fed does and if we cut through kind of the very short statement and some of his commentary, the Fed really didn’t do and exactly what we thought they were going to do and they’re most likely going to do in July, what we think they’re going to do, which is nothing.

01:09 Tom

Right? So certainly, I think that he is trying to use a little bit of a hawkish tone to help the market do some work for him on rates and to pressure inflation. But while the CPI print was positive, the market’s always what have you done for me lately, right?

01:21 Tom

And so now we’re looking at oil higher and even if inflation peaked in June or in May, which it probably did for the year, it still has to decline further to take rate hikes off the table for later in 2026. We’ve got to see some more continuation of these numbers in the coming months.