CPI at 3.9% and the Fed Rate-Cut Paradox: What the June Data Really Means
June CPI is tracking 3.9% year-over-year per the Cleveland Fed Nowcast, down from May's 4.2% print, and the Federal Reserve has made clear it is not impressed. The gap between a softening headline and a core reading stuck at 2.85% is where all the policy difficulty lives right now, and it explains why the committee voted 12-0 to hold rates at 3.50%-3.75% on June 17 while markets were still debating when cuts would arrive. Key Takeaways June CPI headline is tracking 3.9% YoY (Cleveland Fed Nowcast: 3.92%), down from 4.2% in May, driven by a roughly 1.1% monthly decline in gasoline prices after the Strait of Hormuz partially reopened. Core CPI at 2.85% YoY has barely budged from May's 2.9% and…
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