00:00 Speaker A
Let’s take a look at some polymarket odds on how many Fed rate cuts uh are in the prediction markets that they are forecasting for this year. So zero cuts is looking at the most likely at about 40% and Yahoo Finance’s Jennifer Shonberger joins me now.
00:15 Speaker A
Um, Jennifer, I don’t think it’s anything new that it’s going to be tough for the the Fed to cut rates this year in the face of soaring inflation, even if the conflict is over right now, but talk to us a little bit about some of what’s going on uh with the Fed today.
00:33 Jennifer Shonberger
Uh, sure. So, if if we’re going to talk about inflation first, and I guess we’ll talk about worse second. Look, I mean, investors I think are glomming a little bit too much on the fact that yes, we saw the headline number jump up as expected because oil prices went up, energy prices, gas prices pushed that up, uh, CPI by 3.3%.
00:52 Jennifer Shonberger
But what if you looked at the core number, you know, that was up a 10th at 2.6%. So Wall Street sort of breathing a sigh of relief there that, hey, you know, inflation looks all right, maybe the Fed can cut towards the end of this year, but I think it’s premature for that.
01:09 Jennifer Shonberger
Because we don’t know how much longer energy prices are going to remain elevated. Even if the ceasefire holds, there’s a lot of cleanup to do.
01:21 Jennifer Shonberger
And so, so long as energy prices remain elevated, that could have consequences for not just headline inflation, but of course core inflation. We would probably need to see energy prices elevated for at least a full quarter for that to begin to start trickling down.
01:40 Jennifer Shonberger
Of course, we’ve only had what a month of that according to the CPI. We’re now into our second month here. So I think that at this point, the Fed holds steady. I don’t see them cutting. Of course, a lot can change as we get into the second half of the year or into the fall months.