Latest / Markets with Megan: A Quick Financial Markets Update / Could This CPI Report Spark a Rate Cut? | S2 E052 | 06-11-25

Transcript

Could This CPI Report Spark a Rate Cut? | S2 E052 | 06-11-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: The Fed's really going to like that inflation report that we got this morning.
• 0:03
  Megan Horneman: It's Wednesday, june the 11th, and this is Markets with Megan.
• 0:06
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• 0:08
  Megan Horneman: You can hit that alarm bell.
• 0:09
  Megan Horneman: You can even share it with friends, family and colleagues.
• 0:12
  Megan Horneman: But we're here today to discuss the economic reading we got on inflation for the month of May, and this is the Consumer Price Index.
• 0:20
  Megan Horneman: What we saw that the readings on both the headline level and the core level came in better than expected, and that's the fourth month in a row that we've seen better than expected inflation data.
• 0:31
  Megan Horneman: When you look at the year over year number, inflation is rising 2.4% on the headline level and that's in line with expectations.
• 0:41
  Megan Horneman: But when you look at the core level which is important and what the Fed's going to look at, that's going to exclude things like food and energy that rose 2.8% compared to what the expectation was for 2.9%.
• 0:53
  Megan Horneman: So this is good news.
• 0:55
  Megan Horneman: The Fed's going to like this.
• 0:56
  Megan Horneman: It doesn't mean it's necessarily going to push them to the table to cut interest rates next week, and the reason behind that is when you dig into some of these details within the report.
• 1:06
  Megan Horneman: We've seen big declines on a month-over-month basis in things that are discretionary.
• 1:11
  Megan Horneman: So when you look at things like airline fares, apparel cars both used and new cars these prices are actually declining for the month of May.
• 1:22
  Megan Horneman: But where that sticky inflation is is in the service side of the economy, in the housing side of the economy, and these did tick higher for the month of May.
• 1:31
  Megan Horneman: So when you look at the housing component, it's rising about 4% on a year-over-year basis.
• 1:37
  Megan Horneman: That still is a bit high for the Fed's comfort zone.
• 1:39
  Megan Horneman: Now we'll have plenty more economic information this week.
• 1:43
  Megan Horneman: We'll get some more from an inflation standpoint, we'll get some consumer confidence readings and all of this will be leading up to the Fed's meeting which takes place next week.
• 1:53
  Megan Horneman: If you want a further history of our podcast, you can go to marketswithmegan.
• 1:56
  Megan Horneman: fm.
• 1:56
  Megan Horneman: Thank you,