The Federal Reserve's Initial July Inflation Forecast Looks Fantastic on the Surface, but Something Sinister Lurks in the Details

While the Federal Reserve's July inflation forecast shows broad inflation declining to 3.49% due to falling oil prices following U.S.-Iran peace talks, Core PCE inflation is projected to rise to 3.47% in July. This indicates that inflationary pressures from the Iran war have spread beyond energy into the broader economy, potentially forcing the Fed to consider rate hikes that could slow AI data center growth and hurt a stock market priced for perfection.