SURPRISE INFLATION! The U.S. CPI cools more than expected and calms the markets
Will the #Fed have a clear path for rate cuts, despite the uncertainty of the tariffs of #TRUMP ?
Stock futures rose on Tuesday after the release of a new inflation report in the United States, which showed a greater cooling than expected.
The Consumer Price Index (CPI) increased by 2.7% annualized in July, below the Dow Jones estimate of 2.8%. Meanwhile, the core CPI, which excludes food and energy, rose by 3.1%, slightly exceeding forecasts.
Lower Inflation: The main CPI figure below expectations provides relief to the markets, which interpret this as a sign that the Federal Reserve (Fed) may have room to be more flexible with interest rates.
Uncertainty over Tariffs: The inflation report arrives at a time of trade tension. President Donald Trump announced a 90-day extension on the pause of tariffs on Chinese goods. However, doubts persist about the long-term impact of his tariff policy on the economy and inflation.
Cautious Outlook: Experts like Brent Schutte, chief investment officer of Northwestern Mutual, warn that it is "too early" to assume rate cuts, given that the total impact of the tariffs on the economy remains an "unknown." Schutte also points out that the current high valuations of stocks could exacerbate any negative impact.