CONCERNING CPI

July CPI was steady at 0.2% M-o-M and 2.7% Y-o-Y. Unfortunately, the all-important core measure rose from 2.9% to 3.1% Y-o-Y, the highest since 2/25, and was up 0.3% M-o-M, adding to the headache the Fed already has. This is because inflation has clearly stopped falling yet is well above the Fed’s desired level. Moreover, this report showed limited evidence of tariff effects, the impact of which is lagged.