Sonu Varghese, Global Macro Strategist at Carson Group, joins Remy Blaire to discuss the recent decision by the Federal Reserve to keep interest rates unchanged following their July meeting. While two members of the FOMC advocated for a 25 basis point rate cut, Chair Powell expressed concerns about inflation, particularly in light of the impact of tariffs.
Sonu highlights that Powell’s hawkish tone reflects a labor market close to maximum employment, but persistent inflation remains a concern. We also examined the latest core inflation data, which showed an annualized increase of 3.1% in June, indicating that inflation issues are far from resolved.
As we approach the end of July, the pair discuss the recent Q2 GDP report, which, despite topping expectations, revealed a slowdown in core economic activity. Sonu points out that real final demand is growing at just 1.2%, a significant drop from previous years.