Inflation Report Will Reveal If Fed Cut Was a Risky Move

​Inflation Test Ahead
The Fed’s preferred inflation gauge — the personal consumption expenditures (PCE) index — drops Friday. Economists expect a 2.8% annual rise, but anything hotter could make last week’s quarter-point cut look premature.

Bond Market Pushback
Oddly, Treasury yields rose after the cut, with the 10-year and 30-year climbing. Normally, rate cuts push yields down. This move signals bond traders may not be convinced the U.S. economy truly needed easing.

Stocks Brush It Off
Wall Street wasn’t fazed. The S&P 500 and Dow closed at fresh records Friday, and the Nasdaq added 2.2% for the week. Investors are betting Powell knows what he’s doing — or at least hoping lower rates fuel more upside.

Political and Global Moves
- Trump and Xi: Their much-hyped TikTok call ended without a deal but with hints of progress. Trump teased the Murdochs could be part of TikTok’s future ownership.
- Visa Fees: Trump also unveiled a steep $100,000 annual fee for H-1B visas, rattling Big Tech. Companies are scrambling to assess the fallout.
- South Korea: President Lee Jae Myung warned of a potential crisis, saying a massive $350 billion U.S. investment could destabilize the Korean economy without a currency swap.

The Big Question
​Hindsight is always 20/20. The Fed’s gamble will be judged by whether inflation cools or claws back. Friday’s report could vindicate Powell — or leave the central bank second-guessing.