Overview

• On August 12, President Trump posted on Truth Social demanding that Fed Chair Jerome Powell cut interest rates immediately and threatening a major lawsuit over alleged mismanagement of a $3 billion Fed renovation project.
• July’s CPI matched June with a 2.7% annual increase while core inflation rose 3.1%, a reading that surprised markets and reinvigorated rate-cut expectations.
• Fed Funds futures surged to price a 94% probability of a 25 basis-point cut in September and U.S. stock indexes climbed after the inflation report.
• Trump argued that tariffs did not drive consumer price increases and instead highlighted their contribution to Treasury revenues.
• The administration’s reported nomination of Stephen Miran as a Federal Reserve governor is viewed as an effort to expand presidential influence over central bank governance.