MUGO ODIGWE:
00:00:00
New data on inflation for the month of June. The latest report shows consumer prices picked up higher than expected. Let's take a look right now at the markets, as investors see some tangible proof of the impact of President Trump's tariffs. Now, a reminder, Trump has set a new tariff deadline. He says, US trading partners now have until August 1 to negotiate new deals or face significantly higher levies. Some countries could see rates up to 50%. Trump posted on social media moments ago saying, quote, "Consumer prices low. Bring down the Fed rate now." OK, let's get to CBS News MoneyWatch correspondent Kelly O'Grady. She is live from the New York Stock Exchange. Kelly, so good to see you today. Can you help us break down this report? Of course. The June CPI report, I think the headline here is, we are starting to see those impacts of tariffs in specific items, but it's still unclear how big of an impact over the next few months, as well as whether this is going to be a one-time increase or more of a sustained increase throughout the rest of the year. So a couple things that I want to highlight. 2.7%-- that is the annual inflation rate, what we call the headline inflation number. That's up from 2.4%. It's not a huge jump, but it is pretty meaningful. Now, when you look at what's driving that inflation-- shelter, housing. That was a big one. That's been particularly sticky. So think about your rent, your housing prices. That drove most of that inflation on an annual basis. The other thing that I want to highlight-- and this is really where you can see the impact of tariffs-- is clothing and apparel. We get a lot of that made overseas. We import it into the US. That rose 0.4% on a monthly basis. That was higher than the average 0.3% that we saw across the index. The other area that we saw is in household furnishings and furniture. That actually rose a full percentage point in the month of June. And again, those are things that we are often importing from other places. New vehicles, though, actually came down. So I think the way to think about this is yes, we are seeing the impacts of tariffs. But remember, we're living in a world where there is a 10% baseline tariff across most countries. China, of course, has that 30%. So this is something that businesses have been able to absorb more. Of course, we know they've stockpiled. In fact, June, out in LA, was the record amount of goods coming into that port as companies are trying to get ahead of these new tariff deadlines. So really, the next three to six months are going to be important to see how much of an increase we actually see in prices when you and I go to the store. OK, so the next three to six months will be important. But what does this report tell us about the near future of interest rates? So this really tells Fed Chair Jerome Powell, hey, look, what I've been saying, that we need to wait and see, is actually being borne out, that we are seeing some of this inflation. So we're going to have an interest rate decision at the end of July. And I think what he's going to say in that presser is, look, I told you. We are actually seeing some increases, and I want to wait for more data. So very much, we are not expecting an interest rate change in July. And the big question is going to be how many interest rate decisions or interest rate cuts we might get through the rest of the year. OK. Now, Kelly, there is also news on the chip front with NVIDIA once again able to sell in China. So what is the impact on the markets? Any? Well, if you're an NVIDIA holder today, it's a good day for you. Because I just checked. The stock's up over 4%. And it did lift the S&P 500 to a fresh high of 6,300, though we are off those highs right now, just by a bit. Basically, what this is telling investors is a big market for NVIDIA, which is China. That's a big revenue driver in terms of their chip business. They're going to be able to sell at some point in the future, those chips that were designed specifically to get around the export controls when it comes to Beijing. So a good day for NVIDIA stockholders and a good day for, I would say, the tech industry in general.
