Expect a lot of volatility around inflation over the next 6-9 months: Verdence's Megan Horneman

Monetary Policy & Interest Rates - The market's pricing in an 80-90% chance of rate cuts in September is considered unlikely due to upcoming data releases [5] - The Fed's decision-making remains data-dependent, with upcoming inflation and employment reports being crucial [3][6] - There's a possibility of rate cuts later in the year, but the timing and magnitude are uncertain [4] - The Fed should be cautious about adopting a dovish tone, as it could lead to a resurgence of inflation [8] Inflation Outlook - Inflation pressures persist, particularly in sticky areas like services and housing [4][11] - The impact of tariffs implemented in August on inflation is yet to be fully realized [7][14] - The fourth quarter is expected to be a volatile period for inflation due to the delayed effects of tariffs [15] - Inflation is not considered a long-term issue, but volatility is expected over the next 6-9 months [13] Employment & Economic Concerns - The labor market is showing signs of weakening, which the Fed will need to consider [4][10] - The Fed needs to balance concerns about inflation with the employment picture [9][10]