Fed's Inflation Outlook: A Cautious Approach Amid Chip Crisis

Federal Reserve officials, while welcoming the June CPI data showing cooling inflation, are not declaring victory. Fed Chairman Kevin Warsh acknowledged the data was 'positive relative to expectations' but warned against 'cherry-picking,' emphasizing the need for more evidence before feeling confident. Chicago Fed President Austan Goolsbee echoed this sentiment, calling the report 'surprisingly benign' but stressing the need for 'several more months' of such data. The Fed's next policy meeting (July 28-29) looms, with a likely hold in the 3.50%-3.75% range. However, the potential impact on chip companies like Nvidia and AMD remains uncertain, given TSMC's reduced production capacity due to the China-US trade tensions. More PPI and PCE data will be critical in shaping the Fed's next move.