Quick Read – Bond markets are rapidly pricing out Federal Reserve rate cuts after headline CPI rose to 3.8% year-over-year (above 3.7% forecasts) and wholesale PPI surged 6.0% annually (versus 4.9% expectations), with futures now showing only 1 cut expected versus 3 cuts a month…
o. – Newly approved Fed chair Kevin Warsh, expected to favor rate cuts, faces pressure from accelerating inflation including oil prices above $100 per barrel and shelter inflation that doubled in April, forcing policymakers to consider rate hikes rather than easing despite Trump’s preference for lower rates. – The analyst who called NVIDIA in 2010 just named his top 10 AI stocks. Get them here FREE
For most of the past year, investors have treated Federal Reserve rate cuts like an inevitability. The only debate seemed to be whether the Fed would trim rates two times or four times in 2026. That narrative is suddenly looking fragile.
Yesterday’s Consumer Price Index (CPI) report came in above Wall Street expectations, and this morning’s Producer Price Index (PPI) report ran even hotter. Together, the two inflation gauges delivered a message bond markets understood immediately: inflation is not done fighting. That creates an awkward backdrop for Kevin Warsh, who was just approved by the Senate to join the Federal Reserve Board of Governors and is widely expected to soon replace Jerome Powell as Fed chair.