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Institution: Short-term Risks for US CPI Data Still Tilted Upwards
Summary: According to Columbia Threadneedle Investments senior economist Anthony Willis, despite relatively mild inflation in the US, the current level remains significantly above the Fed's 2% target, with short-term risks still leaning towards an increase. He stated, 'The current data will likely keep the Fed in a 'wait-and-see' mode during the release of July and August ...
According to Columbia Threadneedle Investments senior economist Anthony Willis, despite relatively mild inflation in the US, the current level remains significantly above the Fed's 2% target, with short-term risks still leaning towards an increase. He stated, 'The current data will likely keep the Fed in a 'wait-and-see' mode during the release of July and August CPI data, until the next interest rate meeting on September 17.' By then, the Fed should be able to assess more clearly the transmission effects of tariffs on inflation and obtain more evidence of weakness in the labor market. Willis believes inflation is likely to move towards 3%, but given the dual mandate, the Fed may still see the need to cut interest rates later this year.
