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What Sticky Services Inflation Means for the Fed
Season 2
Episode 72
Published 2 weeks, 3 days ago
Description
The Fed has cut rates to 3.63 percent, but services inflation remains stubbornly above pre-pandemic norms. In this episode, Lucas and Luna dig into the May CPI data, where services prices rose 0.3 percent month-over-month while goods prices actually fell. They explore why the Fed is more worried about supercore services inflation than headline numbers, and what the ten-year breakeven rate dropping to 2.21 percent tells us about market expectations. The hosts also discuss how the Iran oil sanctions waivers could affect energy costs and complicate the inflation picture. Specific examples include airline fares, rent of shelter, and car insurance premiums. A grounded look at the Fed's toughest remaining challenge.