Latest / Markets with Megan: A Quick Financial Markets Update / Are Tariffs Finally Hitting Your Wallet? | S2 E057 | 07-15-25

Transcript

Are Tariffs Finally Hitting Your Wallet? | S2 E057 | 07-15-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: The tariffs may be starting to hit our wallets.
• 0:02
  Megan Horneman: It's Tuesday, july 15th, and this is Markets with Megan.
• 0:05
  Megan Horneman: If you like this podcast, please subscribe.
• 0:08
  Megan Horneman: You can hit that alarm bell.
• 0:09
  Megan Horneman: Also share it with friends, family or colleagues.
• 0:12
  Megan Horneman: But we're here today to give you a little bit of a recap of what we saw this morning from an inflation standpoint.
• 0:17
  Megan Horneman: Remember the Federal Reserve kept interest rates on hold last month and continued to say that they would wait and see how the tariff impact unfolded in the inflation data.
• 0:28
  Megan Horneman: You're going to see a lot of headlines that inflation came in a little bit weaker than expected.
• 0:32
  Megan Horneman: Inflation seems tame.
• 0:34
  Megan Horneman: We're not really seeing a tariff impact.
• 0:36
  Megan Horneman: Let's be careful there jumping to conclusions before we dig into the details.
• 0:41
  Megan Horneman: So let's look at this report First of all on a headline perspective.
• 0:44
  Megan Horneman: So this includes all of the factors in the consumer price index.
• 0:48
  Megan Horneman: This was a little bit.
• 0:50
  Megan Horneman: It came in as expected, but it was higher than last month.
• 0:53
  Megan Horneman: It rose 0.3% versus 0.1% last month.
• 0:57
  Megan Horneman: That brings the year over year growth rate to 2.7, slightly higher than expected and much higher than it was the prior month, which was 2.4%.
• 1:07
  Megan Horneman: Now we can equate that big jump there to primarily energy prices that were up significantly in the month of June.
• 1:14
  Megan Horneman: But let's take out those volatile energy prices and the food prices and look at the core level.
• 1:19
  Megan Horneman: This is what the Fed likes to look at because it is less volatile and this is where we see some of the sticky inflation indicators.
• 1:26
  Megan Horneman: At the core level, on a month-over-month basis, it rose about 0.2%, a little bit higher than the last month and a little bit lower than expected.
• 1:35
  Megan Horneman: But let's look at the numbers on a year-over-year basis, which is what we look at and what the Fed likes to look at as well.
• 1:42
  Megan Horneman: It's growing 2.9% at the core level.
• 1:45
  Megan Horneman: That's versus 2.8% in the prior month.
• 1:48
  Megan Horneman: So again, a little bit higher.
• 1:51
  Megan Horneman: The markets, like I said, sorry, the headlines are focusing on that.
• 1:54
  Megan Horneman: This wasn't bad.
• 1:55
  Megan Horneman: It wasn't bad, but it's not going in the right direction either.
• 1:58
  Megan Horneman: We are looking at tariffs showing up in things like whether you look at apparel, you can look at appliances.
• 2:04
  Megan Horneman: Some of these prices we're seeing get that impact from tariffs and we haven't necessarily seen what the tariffs are ultimately going to be.
• 2:12
  Megan Horneman: Again, that's been kicked down the road.
• 2:13
  Megan Horneman: So our concern is that this is a problem going forward into the second half of this year and is probably going to keep the Fed on hold through to the September meeting.
• 2:23
  Megan Horneman: Now, when we look at really the true core, where we spend the majority of our money on the service sector, when you take the consumer price index at the service level and you take out energy, take out that volatile component, that's rising about 3.6% on an annual basis.
• 2:41
  Megan Horneman: That is substantially better than what we saw in 2022.
• 2:44
  Megan Horneman: It was about a little over 7%, but at 3.6% year over year it's still growing above the historical average and above the Fed's comfort zone.
• 2:54
  Megan Horneman: So that's something they're watching closely.
• 2:55
  Megan Horneman: We're seeing the reaction in the markets today.
• 2:58
  Megan Horneman: Where equities are down, they are concerned about the rise we're seeing in interest rates.
• 3:02
  Megan Horneman: The 30-year Treasury has now intraday gone above the 5% level because the Treasury market's again concerned about future inflation and what we may see over the next few months as we try and round out this year with the tariffs that will go into effect in the second half of this year.
• 3:20
  Megan Horneman: That's all we have today.
• 3:22
  Megan Horneman: If you want a history of this podcast, you can go to marketswithmeganfm.
• 3:25
  Megan Horneman: Thank you.