According to ChainCatcher and Jinshi, Nick Timiraos, the "Federal Reserve mouthpiece," recently wrote: "The June inflation data may keep Federal Reserve officials cautious. Those who previously predicted that tariffs would cause more significant price pressures later this year might not have much reason to change their view after seeing the June data—especially if retailers delay price adjustments as much as possible. The June data will only make the upcoming July and August data appear more important.
Similarly, policymakers who believe tariffs will not trigger significant inflation (due to insufficient corporate pricing power) will have almost no reason to change their view after Tuesday's report. In recent weeks, Federal Reserve Chairman Powell has indicated that the threshold for rate cuts may have slightly lowered compared to spring.
This shift reflects an assessment that inflation risks may take longer to materialize and thus have a relatively weaker impact. If the Federal Reserve maintains the expectation that inflation acceleration will not be too intense, Powell might open the door for rate cuts as early as September, based on a softening labor market or improved inflation data.
