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Luke Kawa

Here’s how the inflation outlook could change depending on what Trump does next with tariffs

While the situation regarding legal rulings and appeals on President Trump’s tariffs remains fluid, to say the least, no matter what the courts decide, if the president still wants higher tariffs, he has options to make that happen. Or not.

Omair Sharif, president and founder of Inflation Insights LLC, helpfully took a look at some of these different paths and explored their implications for core CPI and core PCE inflation. His conclusions on how his year-end inflation forecasts would change after doing some back-of-the-envelope math on a couple different scenarios:

“1. The White House uses section 122 to impose a blanket 15% tariff on all countries and on all goods for the next five months (say from June to October).
— In this case, the impact on the core CPI and core PCE is to reduce the forecast by around -50bps to -75bps, respectively.

2. All tariffs on finished consumer goods are revoked, except for the 25% on autos, which was not part of the Court’s decision.
— Under this outcome, the YoY core CPI and core PCE estimates are cut by 1.2pp and 1.6pp, respectively, with the core PCE likely much closer to 2.5%
— The moderation in the core PCE is significantly larger because new + used autos only make up about 3.5% of the total core PCE vs 8.5% of the core CPI.”

We’ve seen some pricing out of near-term inflation risk recently as tariffs have been dialed down and now blocked by courts:

But market-implied odds of Fed easing haven’t changed too much on this news or President Trump’s meeting with Fed Chair Jay Powell. We’re currently looking at about 110 basis points of cuts priced in by year-end versus 107 bps on Wednesday.

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SpaceX gets a wave of bullish ratings from Wall Street analysts

SpaceX received more than a dozen positive analyst calls on Tuesday — including from major Wall Street banks — as they initiate coverage on Elon Musk’s space and AI company.

SpaceX went public on June 12 at a $2.2 trillion valuation, the largest debut in history. While the company hasn’t yet posted a profit, it seems to have convinced Wall Street that it will get there and grow its valuation on the way.

Of the at least 17 analysts that gave a rating on Tuesday, all but one gave it a “buy” or “outperform” rating. MoffettNathanson was "neutral."

The ratings come as SpaceX joined the Nasdaq 100 index, a benchmark tech-heavy basket of companies that underpins millions of portfolios. The inclusion adds built-in demand for the stock from index funds and ETFs.

Still, SpaceX fell more than 5% on Tuesday amid a broader sell-off, and is currently effectively flat from its opening price of $150 a share.

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