We are seeing tariff prices passing through into inflation data, says JPMorgan's Feroli

Economic Indicators - The core PCE number, which the Fed focuses on, is expected to remain close to 3%, indicating ongoing inflation concerns [3] - Recent inflation data suggests that the Fed is unlikely to cut rates by 50 basis points in September, but an additional rate cut this year has been added, increasing the total expectation to three cuts [7] Labor Market - There is clear evidence of a weakening labor market, with an ongoing rise in the unemployment rate, which could lead to downward pressure on wages and alleviate inflation concerns in the future [5][4] Market Sentiment - Despite inflation concerns, bullish sentiment in the market is likely to continue, supported by new all-time highs in both the US and overseas markets [6][8] - Investors appear to be looking for reasons to sell stocks, but the current conditions may continue to support and propel stock prices [8] Consumer Impact - The impact of economic conditions on working-class consumers in Q4 is critical, with wealth gains primarily accruing to upper-income consumers rather than lower-income ones [9][10] - Price pressures may persist into the holiday shopping season due to tighter inventories, influenced by tariffs [11] Home Furnishings Sector - The home furnishings subindustry, including companies like Wayfair and RH, has performed strongly, driven by lower rates and increased consumer spending on home upgrades [12]