Headline Inflation Is Easing, but Trumpflation Isn't -- and That's a Recipe for Disaster on Wall Street

The article argues that while U.S. headline inflation eased for a second straight month in July, the broader market risk remains elevated because core inflation is still sticky. Cooling energy and crude oil prices helped lower headline CPI to 3.4% from 3.5% in June, which reduced the odds of a September Fed rate hike and supported equities. However, the author says tariffs and supply-chain disruptions are keeping Core PCE elevated around 3.3%, implying “Trumpflation” is still filtering through the economy. The key market implication is that if inflation remains above target, the Fed may be forced to tighten policy, raising borrowing costs and potentially pressuring stretched stock valuations, especially the AI/data-center buildout theme that has helped power the market to new highs in 2026.