Daily Newsletter 7/15/25
Consumer prices increased by 2.7% in June compared to a year earlier, outpacing May’s 2.4% rise and marking the highest annual inflation rate since February. Core inflation, which excludes volatile food and energy categories, was 2.9% year over year, aligning with market expectations.
This uptick may signal that tariffs are beginning to influence pricing, as higher import costs start to filter through to consumers. Categories such as furniture, vehicles, and recreational goods appear to be among the earliest areas impacted. If current trends continue, the price effects of tariffs are likely to become more pronounced in the months ahead.
A near-term Federal Reserve rate cut has become increasingly unlikely. Most central bank officials continue to be cautious about lowering rates while inflation remains above target, especially given ongoing tariff pressures and uncertainties about their full impact. Recent FOMC minutes confirm that only a small number of policymakers supported a rate cut at the upcoming July meeting, with the majority preferring to wait for clearer evidence that inflation is subdued and that the labor market is softening. However, an additional factor in this equation is the renewed pressure from former President Trump advocating for an immediate rate cut.
The anticipated rise in inflation heightens the importance of labor market data for assessing the overall health of the U.S. economy and for informing Federal Reserve policy decisions. Whether the labor market is showing signs of weakness will become clearer after the release of jobless claims data on Thursday.
A number of prominent companies are set to report their quarterly earnings today, with results spanning financial firms and other sectors. As the week progresses, market participants will be watching these announcements closely—not only from banks, but also from major companies across a range of industries—to gauge the health of corporate America and form expectations for the remainder of the year.
With forecasts pointing to a potential slowdown in earnings momentum, this week’s results carry added importance and are likely to play a key role in influencing market sentiment and direction.