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2025-07-31 20:41:07
[US Inflation Rebounds Unexpectedly, Further Adding to the Conflict about the Fed's Path to Rate Cuts] ⑴ US inflation accelerated in June as import tariffs began to push up the cost of some goods. ⑵ The personal consumption expenditures (PCE) price index rose 0.3% month-over-month in June, accelerating from a revised 0.2% in May. ⑶ Year-over-year, the PCE price index rose 2.6% in June, up from 2.4% in May and exceeding market expectations of 2.5%. ⑷ Excluding the volatile food and energy components, the core PCE price index rose 0.3% month-over-month and 2.8% year-over-year, matching May's increase. ⑸ Economists generally expect businesses to pass on the higher costs of tariffs to consumers in the second half of the year, pushing up prices. ⑹ Federal Reserve Chairman Powell suggested the impact of tariffs may be a "one-time price effect," but acknowledged that the transmission process may be slower than expected. ⑺ Consumer spending grew 0.3% in June, reversing the flat reading in May. ⑻ In the second quarter, the economy rebounded at an annualized rate of 3.0%, mainly due to a significant narrowing of the trade deficit. ⑼ Although the Federal Reserve kept interest rates unchanged on Wednesday, the rebound in inflation data may make it more cautious about whether to cut interest rates in September.
