In the latest Take 5, with hosts Ryan Detrick, Chief Market Strategist, and Sonu Varghese, VP, Global Macro Strategist, we break down the latest CPI and PPI reports, the ways tariffs are passed on to consumers, and their potential impact on Federal Reserve rate decisions. They also touch on the upcoming Jackson Hole Symposium and what it could reveal about the Fed’s September plans.
Key Takeaways
- Tariffs’ impact on inflation: Evidence suggesting U.S. businesses — not foreign exporters — are paying the bulk so far.
- Producer vs. consumer prices: Hot PPI data indicates producers may now be passing more costs to consumers.
- Fed decision-making: Mixed signals and rising inflation could lead to an “uncomfortable” rate cut in September, with probabilities shifting after the latest inflation reports.
- Market performance: Historical data suggests markets often perform well following rate cuts when near all-time highs.
- Upcoming Jackson Hole Symposium: The annual event could be a potential source of clearer guidance on the Fed’s September decision.
