Latest news with #SeemaShah
Yahoo
13 hours ago
- Business
- Yahoo
June inflation data reaffirms Fed pause as tariff uncertainty grows
June's Consumer Price Index (CPI) report likely gives the Federal Reserve room to continue its wait-and-see approach to cutting rates amid uncertainty over how President Trump's tariffs will impact inflation. On a "core" basis, which excludes volatile food and energy costs, CPI increased 0.2% from the previous month, slightly lower than economists' expectations but ahead of May's 0.1% gain. Following the report, investors were placing a 97% probability on the Fed holding rates steady at its July meeting, up from 93% on Monday, according to the CME FedWatch Tool. Meanwhile, the chance of a September rate cut dropped sharply after the release, falling below 60% initially and inching closer to 50% as markets digested the data. "The Fed's ability to cut rates was resting heavily on today's inflation print," Seema Shah, chief global strategist at Principal Asset Management, wrote following Tuesday's release. "With inflation coming in softer than expected for the fifth month in a row, it may initially seem like there is still little sign of the tariff-induced boost to inflation that the Fed has been expecting," she continued, referring to the slower-than-expected monthly gain in core prices. "However, with increases in categories like household furnishings, recreation, and apparel, import levies are slowly filtering through to core goods prices." Read more: How to protect your savings against inflation Indeed, apparel prices rose 0.4% in June, and footwear jumped 0.7% after several months of declines. Furniture and bedding prices also climbed 0.4%, reversing the 0.8% drop recorded in May, a potential indication that tariff-related cost pressures are beginning to reach consumers. Shah noted that the full inflationary impact of tariffs will take time to materialize, particularly as many goods were front-loaded ahead of the latest rollouts. "With higher tariffs being announced, it would be wise for the Fed to remain on the sidelines for a few more months at least," she added. Greg Daco, chief economist at EY, echoed that view, noting that the full effects of tariffs have yet to unveil themselves. He believes any resulting price increases will likely be short-lived. "A lot of businesses are talking about rapidly passing on the higher tariff shock from these higher duties. So we're anticipating a rather swift pass-through," he told Yahoo Finance. "But if we are in an environment where there are staggered tariffs over the next year, then there is a risk of more inflation persistence. And I think that's the key risk for the US economy right now." The Fed itself has appeared divided on when to lower interest rates. Minutes from its June policy meeting revealed a split committee, with "most" officials supporting at least one rate cut this year while "a couple" signaled they'd be open to moving as early as July. Others preferred to hold rates steady through year-end. Meanwhile, President Trump has continued his public campaign for significantly lower rates, writing on Truth Social: "Fed should cut Rates by 3 Points. Very Low Inflation. One Trillion Dollars a year would be saved!!!" Read more: How much control does the president have over the Fed and interest rates? The next major inflation test for the Fed comes Wednesday, with the release of the Producer Price Index (PPI), a measure of how much prices are changing for what businesses sell. Later this month, investors will shift focus to the Fed's preferred inflation gauge, the Personal Consumption Expenditures (PCE) index. But as Wall Street has consistently been reminded, the Fed's cautious stance is being driven not just by recent inflation data but also by lingering uncertainty around President Trump's evolving tariff policy. Ryan Sweet, chief US economist at Oxford Economics, said that if Trump's proposed Aug. 1 tariffs go into effect, the inflationary impact on goods prices could take several months to appear. Sweet, who is currently forecasting the next rate cut in December, said this would likely keep the Fed on hold unless the labor market weakens significantly. "The new tariffs, if implemented, could tilt the risks toward the next rate cut occurring later than in the baseline," the economist said. "The Fed could be comfortable waiting a little too long and then trying to catch up with more aggressive cuts because of the uncertainty around tariffs." Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at
Yahoo
14 hours ago
- Business
- Yahoo
June inflation data reaffirms Fed pause as tariff uncertainty grows
June's Consumer Price Index (CPI) report likely gives the Federal Reserve room to continue its wait-and-see approach to cutting rates amid uncertainty over how President Trump's tariffs will impact inflation. On a "core" basis, which excludes volatile food and energy costs, CPI increased 0.2% from the previous month, slightly lower than economists' expectations but ahead of May's 0.1% gain. Following the report, investors were placing a 97% probability on the Fed holding rates steady at its July meeting, up from 93% on Monday, according to the CME FedWatch Tool. Meanwhile, the chance of a September rate cut dropped sharply after the release, falling below 60% initially and inching closer to 50% as markets digested the data. "The Fed's ability to cut rates was resting heavily on today's inflation print," Seema Shah, chief global strategist at Principal Asset Management, wrote following Tuesday's release. "With inflation coming in softer than expected for the fifth month in a row, it may initially seem like there is still little sign of the tariff-induced boost to inflation that the Fed has been expecting," she continued, referring to the slower-than-expected monthly gain in core prices. "However, with increases in categories like household furnishings, recreation, and apparel, import levies are slowly filtering through to core goods prices." Read more: How to protect your savings against inflation Indeed, apparel prices rose 0.4% in June, and footwear jumped 0.7% after several months of declines. Furniture and bedding prices also climbed 0.4%, reversing the 0.8% drop recorded in May, a potential indication that tariff-related cost pressures are beginning to reach consumers. Shah noted that the full inflationary impact of tariffs will take time to materialize, particularly as many goods were front-loaded ahead of the latest rollouts. "With higher tariffs being announced, it would be wise for the Fed to remain on the sidelines for a few more months at least," she added. Greg Daco, chief economist at EY, echoed that view, noting that the full effects of tariffs have yet to unveil themselves. He believes any resulting price increases will likely be short-lived. "A lot of businesses are talking about rapidly passing on the higher tariff shock from these higher duties. So we're anticipating a rather swift pass-through," he told Yahoo Finance. "But if we are in an environment where there are staggered tariffs over the next year, then there is a risk of more inflation persistence. And I think that's the key risk for the US economy right now." The Fed itself has appeared divided on when to lower interest rates. Minutes from its June policy meeting revealed a split committee, with "most" officials supporting at least one rate cut this year while "a couple" signaled they'd be open to moving as early as July. Others preferred to hold rates steady through year-end. Meanwhile, President Trump has continued his public campaign for significantly lower rates, writing on Truth Social: "Fed should cut Rates by 3 Points. Very Low Inflation. One Trillion Dollars a year would be saved!!!" Read more: How much control does the president have over the Fed and interest rates? The next major inflation test for the Fed comes Wednesday, with the release of the Producer Price Index (PPI), a measure of how much prices are changing for what businesses sell. Later this month, investors will shift focus to the Fed's preferred inflation gauge, the Personal Consumption Expenditures (PCE) index. But as Wall Street has consistently been reminded, the Fed's cautious stance is being driven not just by recent inflation data but also by lingering uncertainty around President Trump's evolving tariff policy. Ryan Sweet, chief US economist at Oxford Economics, said that if Trump's proposed Aug. 1 tariffs go into effect, the inflationary impact on goods prices could take several months to appear. Sweet, who is currently forecasting the next rate cut in December, said this would likely keep the Fed on hold unless the labor market weakens significantly. "The new tariffs, if implemented, could tilt the risks toward the next rate cut occurring later than in the baseline," the economist said. "The Fed could be comfortable waiting a little too long and then trying to catch up with more aggressive cuts because of the uncertainty around tariffs." Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at
Yahoo
18 hours ago
- Business
- Yahoo
Inflation accelerates in June as investors eye tariff-related price increases
Inflation ticked higher in June, according to new government data released Tuesday, as investors continued to look for signs that President Trump's tariffs may be starting to work their way through to consumers. The latest data from the Bureau of Labor Statistics showed that the Consumer Price Index (CPI) increased 2.7% on an annual basis in June, an uptick from May's 2.4% gain, driven by a reversal in falling gas prices. Economists had expected headline inflation to come in at 2.6%. On a monthly basis, prices rose 0.3% compared to May's 0.1% uptick, matching economists' estimates. On a "core" basis, which excludes volatile food and energy costs, CPI rose 2.9% over the past year in June, ahead of May's 2.8%. Monthly core prices increased 0.2%, also ahead of the prior month's 0.1% gain. Heading into the report, economists had expected core CPI to rise 2.9% year over year and 0.3% month over month. The report lands amid renewed trade tensions between the US and other countries. President Trump has unveiled new letters to over 20 countries outlining tariffs ranging from 20% to 50%, including a 35% duty on Canadian goods and 30% tariffs on imports from Mexico and the European Union. He has also floated sweeping 15% to 20% tariffs on most trading partners. The EU, in response, is scrambling to negotiate while preparing potential countermeasures. The back-and-forth raises fresh questions about the Federal Reserve's rate-cutting path. Markets still expect the central bank to hold rates steady at its policy meeting in two weeks, largely due to uncertainties on how tariffs will trickle through to prices. Although inflation remained relatively muted in June, there are signs that tariffs may be starting to make their way through the system. Apparel prices rose 0.4% last month, while footwear saw a 0.7% increase after several months of declines. Furniture and bedding prices also climbed 0.4%, reversing the 0.8% drop the index saw in May, a potential indication that tariff-related cost pressures are beginning to reach consumers. "With inflation coming in softer than expected for the fifth month in a row, it may initially seem like there is still little sign of the tariff induced boost to inflation that the Fed has been expecting," Seema Shah, chief global strategist at Principal Asset Management, wrote in reaction to the report. "However, with increases in categories like household furnishings, recreation, and apparel, import levies are slowly filtering through to core goods prices." Shah noted that tariffs usually take time to show up in inflation data, and because many imports were front-loaded, only a limited number of goods may have been affected so far. While any inflation bump from tariffs is likely to be temporary, the recent wave of new tariffs suggests the Fed would be wise to hold off on policy changes for the next few months, according to the strategist. This is a breaking news post and will be updated. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at
Yahoo
21 hours ago
- Business
- Yahoo
US stock futures mixed as investors await inflation data, corporate earnings
U.S. stock futures are mixed as investors await inflation data and corporate earnings report. Before the open, investors will parse June inflation data to look for signs President Donald Trump's tariffs are fueling higher prices for consumers. Economists, on average, expect annual inflaion up 2.7%, according to Dow Jones. The so-called core rate that excludes food and energy is expected to rise 3%. Those compare to May's 2.4% overall increase and 2.8% core gain. "Inflation pressures have remained muted so far, but tariffs will eventually feed through pushing prints higher and creating some discomfort for the Fed," said Seema Shah, chief global strategist at Principal Asset Management. The Federal Reserve's next policy meeting is at the end of the month, but almost no one expects the Fed to lower rates. Investors will also see the start of earnings season, with JPMorgan Chase, Wells Fargo and Citigroup among the big banks slated to report before the opening bell. The bar for earnings have dropped since the beginning of the year, before President Donald Trump's tariff plan. It is expected to be the weakest earnings season since mid-2023. AT 6:20 a.m. ET, futures tied to the blue-chip Dow slipped -0.05%, while broad S&P 500 futures added 0.37% and tech-heavy Nasdaq futures rose 0.59%. The Trade Desk will join the S&P 500 before trading opens on Friday, July 18, according to S&P Dow Jones Indices. Nvidia plans to sell its H20 GPU again. "The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon," it said in a blog post. MicroStrategy said in a regulatory filing it acquired 4,225 Bitcoin between July 7 and July 13 at an average price of $111,827 per coin, or $472.5 million total. Bitcoin has climbed to successive record highs over the past week. Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday. This article originally appeared on USA TODAY: US stock futures mixed as investors await CPI report Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-06-2025
- Business
- Yahoo
One key thing investors needs to remember about the Fed
At its June meeting, Federal Reserve officials still forecasted two rate cuts in 2025. Principal Asset Management chief global strategist Seema Shah says that when it comes to the Fed, there is one key thing that investors need to keep in mind when it comes to the central bank. Find out what it is in the video above. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
