Fed cut would feed inflation and hurt stocks, warns Wall Street forecaster Jim Bianco

Inflation Trends & Analysis - Consumer prices rose 27% year-over-year in June, accelerating from May's pace [1] - Tariffs are beginning to impact prices of imported goods like toys, apparel, and furnishings [2] - Offsets from sectors like energy and housing could temporarily keep inflation in check [3][4] - Core inflation is settling around 3%, while headline inflation is around 25%-3% [7] - Current inflation levels are significantly higher than pre-COVID levels of 15% [8] Federal Reserve & Interest Rates - In a 3% inflation environment, the Fed is unlikely to move rates, keeping the funds rate at 4% [6] - Market may reject Fed rate cuts if they are perceived as unnecessary stimulus, potentially leading to higher rates [10] - A 300 basis point rate cut, as desired by President Trump, could inject excessive stimulus and produce inflation [11] Economic Factors - The supply chain shock that contributed to the previous 40-year high inflation has largely dissipated [7] - Personal Consumption Expenditures (PCE), the Fed's preferred inflation measure, may show a 03%-04% rise [5]