Finance
Morning Bid: Tariff imprint spied in US CPI
Published by Global Banking & Finance Review®
Posted on July 16, 2025
3 min readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on July 16, 2025
3 min readLast updated: January 22, 2026
US CPI shows tariff impact, affecting market trends and Fed rate predictions. Key earnings reports and UK CPI data also influence investor decisions.
A look at the day ahead in European and global markets from Kevin Buckland
The investing world will be watching U.S. factory inflation on Wednesday, after consumer price data pulled Wall Street back from all-time highs overnight, with Fed predictions of tariff-induced inflationary effects starting to be realized.
Both the S&P 500 and Nasdaq - and by extension, MSCI's world equities index - retreated from record peaks after traders shaved back bets of U.S. rate cuts this year as prices rose for things such as coffee and couches, while staying steady for tariff-exempted (for now) items such as cars.
That swung the spotlight squarely onto producer price data due later today, which could reveal an even bigger building of price pressures, because businesses may still be holding back on passing higher costs to consumers.
This validates Fed Chair Jay Powell's repeated assertion that an expected emergence of tariff-led inflation uptick this summer is cause to hold off on further interest rate cuts for now.
Traders were listening, trimming back bets to 43 basis points of cuts over the rest of the year, from closer to 50 basis points earlier in the week.
President Donald Trump's reading of the data was different though, as he took to his Truth Social platform to post, "Consumer Prices LOW. Bring down the Fed Rate, NOW!!!"
Trump has repeatedly railed against the Fed for not cutting rates, even calling for Powell's resignation, which has fuelled concerns that the U.S. President aims to put the Fed under his thumb.
Powell's tenure ends in May next year, but he has a seat on the Board of Governors until January 2028.
Trump said Tuesday that Treasury Secretary Scott Bessent could be a candidate to replace Powell, but "because I like the job he's doing" currently, he may not end up as a contender.
Bessent, meanwhile, said in an interview on Bloomberg Surveillance that a "formal process" is already starting to identify the next Fed Chair.
As if that wasn't enough to keep investors busy, the U.S. earnings season has also just gotten underway. JPMorgan Chase and Citigroup beat expectations on Tuesday, but were met with a mixed market response.
Bank earnings due Wednesday include Goldman Sachs, Morgan Stanley and Bank of America, while Johnson & Johnson will give more of a snapshot of how consumers are faring.
The corporate calendar by contrast is relatively quiet in Europe, where stock futures are pointing to a mixed open, and Britain's FTSE reopens after hitting an all-time peak on Tuesday only to then end the day down 0.7%, its biggest fall since post-"Liberation Day" tariff turmoil in early April.
The main event will be UK consumer price data, with the consensus among economists for headline inflation to hold steady at 3.4%.
Bank of England policymaker Catherine Mann said on Tuesday that inflation pressures remained a challenge despite a fall in the pace of pay growth in recent months.
Key developments that could influence markets on Wednesday:
- UK consumer price index (CPI) for June.
- U.S. earnings: Morgan Stanley, Goldman Sachs, Bank of America, Johnson & Johnson.
- U.S. industrial production, producer price index (PPI).
- U.S. Federal Reserve officials speaking, including Governor Michael Barr.
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(Reporting by Kevin Buckland; Additional reporting by Rocky SwiftEditing by Shri Navaratnam)
The US CPI data is crucial as it indicates inflation trends, which can influence Federal Reserve decisions on interest rates.
The S&P 500 and Nasdaq retreated from record highs as traders adjusted their expectations for interest rate cuts following the CPI data.
Upcoming earnings reports include those from Goldman Sachs, Morgan Stanley, Bank of America, and Johnson & Johnson.
Fed Chair Jay Powell stated that the anticipated emergence of tariff-led inflation is a reason to refrain from further interest rate cuts for now.
Economists expect the UK consumer price index to hold steady at 3.4%, indicating ongoing inflation pressures.
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