JULY 21, 2025 – INFLATION AT 2.7 PERCENT IN JUNE
The June Consumer Price Index rose 0.3 percent for the month, or at an annualized rate of 2.7 percent. The data was in line with expectations. Core inflation was up 0.2 percent for the month, or 2.9 percent annualized. The effects of the government tariffs are beginning to work their way into the numbers, with the June figures being the highest since February and above the Fed’s targeted 2 percent.
The President has been calling for the Fed to lower interest rates, but the Fed is choosing to wait and see the impact tariffs will have on inflation; they feel the economy is in a strong enough position to withstand maintaining the status quo.
There were rumors last week that Trump was about to replace Fed Chair Jerome Powell, but the President denied the plan. Powell’s term ends May 2026. An independent central bank is important to maintain investor confidence, so it’s unlikely Powell will be removed before his mandate is up.