September rate-hike odds crashed from 60% to 25% on two softer CPI prints, but three more inflation reports arrive before the FOMC meets. Gasoline is up 27% year-over-year and the Cleveland Fed's core PCE model shows inflation running at 3.3%, well above the 2% target. ISM manufacturing hit 55.6 in July, its highest since May 2022, giving Warsh more room to tighten without tipping the economy into recession.
The most widely read finance newsletter on Substack isn't published by a bank, it's Doomberg, where 383,000+ readers get the energy and macro analysis the mainstream press misses. 24/7 Wall St. readers save 17% on their first year here. The inflation debate has entered a strange new phase. During the Biden administration's inflation surge, gas pumps sprouted stickers featuring President Biden with the words "I did that!" Now, during the so-called "Trumpflation" era, the joke has flipped.
A $15 million campaign from the Republican-aligned group Home of the Brave has a whistling Trump emoji bouncing through supermarkets and gas stations, changing price stickers to higher numbers. Its message is political, but the economic problem is real: energy costs have risen sharply, and those increases can spread through the economy. For investors, that matters because the Federal Reserve is no longer debating when to cut rates.
The question has become when Kevin Warsh will raise them. Home of the Brave's Sticker Shock Summer campaign highlights gas prices roughly 36% above their pre-Iran-war level, electricity costs 18% higher, and a tariff burden that Yale Budget Lab estimates at roughly $1,100 per household under the group's assumptions. The campaign's current tracker puts gasoline at $4.06 a gallon, 38% above its Feb. 28 pre-war level.
The politics are debatable. The inflationary mechanics are less so. The Bureau of Labor Statistics reported that energy prices were still 15.7% higher year-over-year in June.
Gasoline was 26.7% higher. Energy feeds into transportation, manufacturing, utilities, and eventually consumer prices. Before Doomberg published a word, its team spent long careers in heavy industry, private equity, and the hard sciences.
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