U.S. July CPI: Core Inflation Hits 3.1 Percent Year Over Year Headline CPI rose 0.2 percent month over month, matching expectations. Year-over-year inflation came in at 2.7 percent, just below the 2.8 percent estimate. Core CPI rose 0.3 percent month over month and 3.1 percent year over year, beating the 3.0 percent forecast. The Fed wanted 2 percent. It got 3.1. That is not a soft landing. That is a stall.
“The consumer price index rose 0.2 percent last month… Excluding the volatile food and energy components, the CPI rose 0.3 percent, the biggest gain since January… The so-called core CPI increased 3.1 percent year-on-year in July after advancing 2.9 percent in June.” https://www.yahoo.com/news/articles/us-consumer-prices-increase-moderately-124022719.html
Stagflation Is Not a Forecast. It Is the Current Regime Bank of America says the Fed will not cut rates in 2025. The reason is stagflation. Growth is stalling. Prices are rising. Cutting rates now would fuel inflation and destroy credibility. This is not easing. This is capitulation.
“The U.S. economy is headed toward a battle with stagflation, not recession and cutting rates could worsen that toxic mix of stagnation and inflation.” https://www.aol.com/finance/bank-america-sees-stagflation-not-183756779.html
Job growth is stalling meaningfully in the US pic.twitter.com/hNFuLufpmM
— Markets & Mayhem 🤖 (@Mayhem4Markets) August 11, 2025
Price Increases over last 5 years…
CPI New Cars: +21.0%
Family Health Insurance: +24.0%
CPI Food at home: +24.1%
CPI Shelter: +27.5%
CPI Food away from home: +30.3%
CPI Used Cars: +32.9%
CPI Electricity: +37.8%
CPI Transportation: +43.4%
CPI Gasoline: +43.9%
US Home Prices:…— Charlie Bilello (@charliebilello) August 12, 2025
Kind reminder to all those currently busy commenting the latest US CPI print (or even worse making trading decisions based on it): 35% of the US CPI data is totally made up… 👇🏻😪 pic.twitter.com/n3nY29i9RE
— JustDario 🏊♂️ (@DarioCpx) August 12, 2025
Wall Street’s Top Banks Say No Cuts Until 2026 Morgan Stanley and Bank of America both reject the idea of rate cuts this year. They cite sticky inflation and constrained labor supply. Markets are pricing recession. The Fed sees stagflation. The pivot narrative is dead.
“Morgan Stanley and Bank of America don’t expect Fed rate cuts until 2026… Tariff-related inflation could limit the Fed’s dovish reaction function.” https://www.inc.com/phil-rosen/economic-outlook-fed-rate-cuts-labor-market-powell-trump-stock-market-investors/91222787
Tariffs Are Driving Inflation. The Fed Cannot Pretend Otherwise Trump’s new tariffs—30 percent on Chinese goods, 50 percent on steel and aluminum, 25 percent on foreign cars—are pushing prices higher. Retailers can no longer absorb the cost. This is not transitory. This is structural.
“Duties already in effect… include a 30 percent tax on Chinese imports, 50 percent on steel and aluminum and 25 percent on foreign cars… The average U.S. tariff rate has jumped from less than 3 percent in January to 15 to 20 percent.” https://www.usatoday.com/story/money/2025/08/12/cpi-report-data-inflation-july/85618971007
The Fed cutting rates into stagflation would be a policy failure. Inflation is sticky. Growth is stalling. Tariffs are tightening the screws. This is not a pivot. It is a trap.
According to official government CPI data, consumer prices rose 2.7% YoY & 3.1% excluding food and energy. By design these numbers substantially understate the actual rise in consumer prices. But even taken at face value, they evidence a need for higher, not lower interest rates!
— Peter Schiff (@PeterSchiff) August 12, 2025