Here's Why the Latest Inflation Data Was Good News for Fed Chair Kevin Warsh and the Stock Market

The latest inflation data is framed as a positive development for Federal Reserve Chair Kevin Warsh and for stock markets, after a period of hawkish expectations. The article notes that Warsh took over the chairmanship in May, following Jerome Powell’s term ending May 15, and that CPI had accelerated in March, April and May amid soaring oil prices linked to the U.S.-Iran conflict. It describes Warsh adopting a tougher stance, warning that rate hikes could be on the table, and recalls that past Fed tightening led the S&P 500 to drop into bear territory. The piece then points to the June CPI report released by the U.S. Bureau of Labor Statistics as a “step in the right direction.” It says the federal funds rate rose from 0.1% in February 2022 to 5.3% in August 2023, later cut to 3.6% in September 2024. Oil price pressure is cited via West Texas Intermediate around $80 per barrel and a CPI lift from 2.4% annualized when the war began to 4.2% by May, easing to 3.5% in June. Still, CME FedWatch shows an 82% chance of at least one hike by December.