Inflation’s latest surge is a gut punch to American wallets.
According to the Daily Mail, the Labor Department reported on Tuesday that U.S. inflation hit 2.7% in June compared to last year, up 0.3% from May’s 2.4%, while core inflation, excluding volatile food and energy, climbed to 2.9%, signaling mounting pressure on President Donald Trump’s economic promises amid trade disputes and Federal Reserve tensions.
This uptick comes at a politically charged moment. Trump’s administration has repeatedly sparred with Federal Reserve Chair Jerome Powell over interest rate policies. The President pushes for lower rates to ease borrowing costs for consumers, businesses, and the government.
Market responses were varied after the report. Dow Jones Futures dipped slightly, while Nasdaq and S&P futures eked out modest gains. Investors seem uncertain about what this means for the broader economy.
Meanwhile, Powell has warned against premature rate cuts. He argues they could fuel even higher inflation. Today’s numbers only muddy the waters for any late-term rate relief.
Trump, however, remains defiant on the issue. He’s publicly criticized Powell, even penning a handwritten note blaming the Fed chief for costing the nation a fortune. The tension is palpable as economic policy debates heat up.
Adding to the inflation story are Trump’s trade policies. Tariffs of at least 10% on a wide range of imports have been imposed amid ongoing global trade disputes. A deadline of August 1 looms for even steeper “reciprocal” tariffs as negotiations with other countries continue.
Experts have long cautioned that such tariffs could drive prices higher for everyday Americans. While the consumer economy hasn’t yet buckled under these pressures, economic strategists warn of a potential bubble burst due to inconsistent trade policies.
American consumers are already feeling tariff shocks. Energy prices jumped 0.9% in the past month, partly due to Middle East tensions, while food prices rose 0.3%, matching May’s increase. Coffee prices, in particular, spiked by 2.2% year-over-year.
Despite these challenges, Trump insists inflation is under control. “There’s very little inflation as you know,” he said during a White House press gaggle on Tuesday. He also claimed the numbers were “very good” and within acceptable margins.
On tariffs, Trump remains unapologetic. “We’re making a fortune,” he declared, touting hundreds of billions in revenue from these measures. Yet, critics question whether these gains offset the rising costs for consumers.
The administration points to some price relief in areas like eggs and gasoline, which dropped after sharp increases post-inauguration. Still, with core inflation creeping up, many wonder if these wins are sustainable.
Analysts are keeping a close eye on the situation. “Today’s CPI report was mostly in-line with expectations,” noted Bret Kenwell, a U.S. Investment Analyst at eToro, speaking to DailyMail.com. But he added, those expectations already anticipated a rise.
“Ask whether today’s reading is just a one-off blip or the start of something bigger,” Kenwell urged regarding Wall Street’s reaction. Investors may now reconsider the Fed’s warnings about tariff-driven inflation risks. For wealth-builders, this is a moment to stay vigilant—consider hedging against price volatility with diversified portfolios or inflation-protected assets.