The Data Doesn't Lie: Trumpflation Is Becoming More Entrenched, Which Is Bad News for the Fed and Wall Street

The article argues that U.S. inflation is becoming more entrenched due to Trump-era policies, especially tariffs and the Iran conflict’s disruption of energy supply. While headline inflation eased from 4.2% in May to 3.5% in June, core PCE remains sticky at 3.3%, with an August estimate of 3.4%. Broadening inflation is reflected in 52% of core PCE components running above 3% year over year, up from 41% at the time of the April 2025 tariff announcement. The piece warns this could force the Federal Reserve to maintain or even raise rates, which would be negative for equities. It suggests higher borrowing costs could also hurt the AI infrastructure build-out and compress valuations across the market, posing a risk to the ongoing rally in U.S. stocks.