Latest / Markets with Megan: A Quick Financial Markets Update / Markets Push for Cuts, but Inflation Won’t Budge | S2 E070 | 08-29-25

Transcript

Markets Push for Cuts, but Inflation Won’t Budge | S2 E070 | 08-29-25 · Markets with Megan: A Quick Financial Markets Update

• 0:01
  Speaker 1: inflation does not make the feds job easy come their september meeting.
• 0:05
  Speaker 1: It's friday, august the 29th, and this is markets with megan.
• 0:08
  Speaker 1: If you like this podcast, subscribe, hit that alarm bell.
• 0:11
  Speaker 1: You can share it with friends, family or colleagues.
• 0:13
  Speaker 1: But we're here today to break down the economic data and this morning we received the feds preferred inflation gauge, which is core pce.
• 0:21
  Speaker 1: This looks at inflation similar to the consumer price index, but it's not as weighted in things like housing as the consumer price index is.
• 0:30
  Speaker 1: So the Fed tends to look at this as a better indication of the true inflation pressures in the economy.
• 0:37
  Speaker 1: Now let's break down the details.
• 0:38
  Speaker 1: When you look at a month-over-month basis, you saw that the reading we saw for the month of July was basically right, in line with expectations.
• 0:48
  Speaker 1: You're looking at rising 0.2% at the headline level, which includes energy, housing, food.
• 0:56
  Speaker 1: When you strip out and look at the core, which takes out food and energy, that rose 0.3%.
• 1:02
  Speaker 1: But the biggest concern here is the year-over-year level.
• 1:05
  Speaker 1: And again, the Fed's looking at the core data.
• 1:08
  Speaker 1: When you look at this, it's rising 2.9% compared to 2.8% in June.
• 1:15
  Speaker 1: So the inflation keeps going the wrong way and yet the markets are begging for an interest rate cut at the September meeting begging for an interest rate cut at the September meeting.
• 1:26
  Speaker 1: Let's look at something that's called the super core inflation and this takes out housing and energy and we're seeing this is a bit more troublesome and this is also something the Fed's going to look at.
• 1:34
  Speaker 1: When you look at that on a year over year basis it's rising 3.3%.
• 1:38
  Speaker 1: It's almost double the annual increase we saw from the month of June and, similar to the month-over-month basis, it went from rising just 0.2% to almost basically 0.4% when you round in July.
• 1:51
  Speaker 1: So we are seeing inflation pressure still there.
• 1:54
  Speaker 1: It's been primarily in this report.
• 1:56
  Speaker 1: In the service sector we saw some easing of goods prices, so that's good for those concerned of the tariff impact, but we're still seeing service price inflation.
• 2:05
  Speaker 1: The market's still pricing in now almost a 90% chance the Fed will cut interest rates at their September meeting and that's because there wasn't any major surprises.
• 2:14
  Speaker 1: However, we are very concerned about this.
• 2:18
  Speaker 1: Inflation is not behind us and the Fed has to walk that very tight line here to be able to maybe ease some of the pressures in the labor market but not fuel inflation.
• 2:28
  Speaker 1: So stay tuned on that.
• 2:30
  Speaker 1: We'll be back next week with some more information from the economy on what's a short week.
• 2:35
  Speaker 1: We hope everybody has a wonderful Labor Day weekend and if you want a history of our podcast, you can go to marketswithmeganfm.
• 2:41
  Speaker 1: Thank you.