Latest / Markets with Megan: A Quick Financial Markets Update / Inflation Headlines Are Misleading Investors | S2 E055 | 06-27-25

Transcript

Inflation Headlines Are Misleading Investors | S2 E055 | 06-27-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Speaker 1: It's one of those days in the market where you have to be really careful about reading the headlines and what they tell you.
• 0:05
  Speaker 1: It's Friday, june 27th, and this is Markets with Megan.
• 0:08
  Speaker 1: If you like this podcast, please subscribe.
• 0:10
  Speaker 1: You can hit that alarm bell, you can share it with friends, family or colleagues, but we want to dig into the economic data that we received today.
• 0:17
  Speaker 1: That's what we're here for.
• 0:18
  Speaker 1: We want to discuss that headline that you see and what we really see underneath of it.
• 0:23
  Speaker 1: And today's the topic was inflation, specifically the Fed's preferred inflation indicator, which is core PCE, and what we saw was that core PCE on an annual basis is rising 2.7%.
• 0:36
  Speaker 1: So this inflation indicator at its core level strips out those volatile items like food and energy.
• 0:42
  Speaker 1: But all the headlines are saying this is a great report.
• 0:44
  Speaker 1: Inflation is subdued.
• 0:45
  Speaker 1: Well, when I look at this, it's telling me that the expectation for inflation on a year over year basis at that core level was 2.6%, but it was.
• 0:55
  Speaker 1: It rose at 2.7.
• 0:56
  Speaker 1: That's not better than expected, that's actually hotter than expected.
• 0:59
  Speaker 1: And then, when you look at what it was last month, it was up 2.5.
• 1:04
  Speaker 1: So we're going in the opposite direction of the Fed's target rate.
• 1:07
  Speaker 1: It's not, you know a crazy high number.
• 1:10
  Speaker 1: It's not going to be something that's significantly going to scare the markets, but I also don't think it's something the market should be complacent about.
• 1:16
  Speaker 1: Inflation, especially from the tariff perspective, this is maze reading.
• 1:21
  Speaker 1: We're not really seeing what inflation impact the tariffs may have yet.
• 1:25
  Speaker 1: We think this will be the next few months and this is why the Fed has reiterated this week that they're gonna stay on hold until they can get a little bit more clarity around these tariffs and what that means to inflation.
• 1:37
  Speaker 1: Specifically, what are companies passing on?
• 1:40
  Speaker 1: And when I look at this report whether you're looking on a month-over-month basis or even on a year-over-year basis, specifically the core level it's not as tame as those headlines are showing Now.
• 1:51
  Speaker 1: The markets are up.
• 1:51
  Speaker 1: The equity markets are having a nice rally.
• 1:53
  Speaker 1: Today.
• 1:54
  Speaker 1: We're about near record highs on the S&P 500.
• 1:57
  Speaker 1: Some will equate that to saying this is some fantastic inflation report.
• 2:00
  Speaker 1: I don't see it, but I think it has more to do with the fact that we are getting some idea on some trade deals possibly in the works.
• 2:07
  Speaker 1: And then some of the other economic data, whether it was personal spending and personal income, they fell pretty dramatically, but you did see consumer confidence rise for the month, while those inflation expectations from the consumer standpoint were a bit better than expected.
• 2:24
  Speaker 1: Again, those are consumer expectations not necessarily what's happening in the market and they're extraordinarily volatile and even when you look at it, they're still much higher than what we have seen historically.
• 2:35
  Speaker 1: So be a little cautious on some of these headline reports that you're seeing.
• 2:39
  Speaker 1: Inflation is not necessarily behind us.
• 2:41
  Speaker 1: That's why we think the Fed's probably going to have to hold till September.
• 2:44
  Speaker 1: Next week we'll be back.
• 2:46
  Speaker 1: It's the first week of every month where there's a lot of economic data.
• 2:50
  Speaker 1: We're going to get ISM manufacturing and we'll end the week with that very important jobs report.
• 2:54
  Speaker 1: That's all we have today.
• 2:56
  Speaker 1: If you like this podcast, you can see a history of this at MarketsWithMeganfm.
• 2:59
  Speaker 1: Thank you.