Will the Fed hike amid volatile US inflation and the escalating Iran war?

 


·       Oil may rally further towards $100 amid escalating US-Iran war tensions and Trump’s plan to take over the SOH from Iran.

·       The US core inflation (CPI + PCE average) may hover around 3.0% in H2CY26 if Trump continues his Iran war 'excursion.'

·       Trump is now trying to take over the SOH completely from Iran’s control, something which Iran is not ready to oblige.

On July 14, apart from Trump’s escalated Iran war 'fun,' the market also focused on U.S. inflation data for June. The US CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services, such as food, transportation, and shelter. Core CPI excludes the volatile food and energy categories to provide a clearer view of underlying inflation trends.

On July 14, the BLS data (NSA) show the annual (y/y) US core CPI inflation rose to 2.6% in June against 2.9% sequentially and 2.9% year over year. The June core CPI was below the median market expectations of 2.8%. The June core CPI was dragged by softer price increases in airline fares (a slump in oil prices following the Iran MOU), apparel, medical care, and household furnishing & operations.

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Ashish Ghosh is a NCFM certified research analyst for the global and Indian financial markets. With more than 15 years of experience in the capital market, Ashish has been published in high-profile online media regularly. He holds a B.Sc. in Math along with NCFM certification for Technical and Fundamental analysis. Presently, he is working with iForex as a financial analyst/content writer since 2017, analyzing mainly the global and Indian markets. You can reach him for professional levels trading ideas or signals through Gmail/telegram ID: ashishghoshjpg/asisjpg

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