Economists On June CPI Numbers: 'The Absence Of Bad News Is Good News' — But Fed 'Unlikely To Sway' On Interest Rates

Leading economists react to June’s Consumer Price Index report, which showed that inflation was largely in line with expectations, while speculating on what this means for Federal Reserve policy and growing tariff-related pressures.

What Happened: U.S. consumer prices rose 0.3% in June, the Bureau of Labor Statistics reported Tuesday, following a 0.1% increase in May. On an annual basis, the Consumer Price Index climbed 2.9%. Core inflation, which excludes food and energy, rose 2.7% from the prior year.

University of Michigan economist Justin Wolfers had a positive take on the results, posting on X that, “The absence of bad news is good news,” while noting that the “numbers are pretty much in line with expectations.”

See Also: June Inflation May Be Hiding A Nasty Surprise For Wall Street

Economist Mohamed El-Erian, the former CEO of Pimco, believes the figures would “undoubtedly intensify the administration’s pressure on the Federal Reserve to reduce rates,” but warned that it's “unlikely to sway most Fed officials given their stated criteria for resuming the rate-cutting cycle.”

Jason Furman, a Harvard economist and former economic advisor to President Barack Obama, posted on X with a more cautious message.

Furman noted that while core CPI remains below 3%, key inflation segments are being distorted by tariffs. “You can see signs of tariffs in these numbers,” he said. “That is only likely to grow,” he says, pointing to unusually high prices in tariff-sensitive categories such as appliances and apparel.

Furman added that “everything ex-housing is worse for the month of June,” referring to prices excluding rent, which he sees as a reversal of prior trends.

He also believes that companies are still working through their “pre-tariff inventories,” suggesting that the inflation could get worse going forward.

Why It Matters: While President Donald Trump was quick to react to this news, asking the Fed to lower the rates, experts such as Mike Konczal of the Economic Security Project have cautioned, saying that, “This does not strike me as a good CPI print.”

Last month, Federal Reserve Chair Jerome Powell told Congress that potential rate cut decisions in 2025 would depend on the tariffs.

“Increases in tariffs this year are likely to push up prices and weigh on economic activity,” Powell told lawmakers, acknowledging risks to both consumer prices and business investment.

Photo Courtesy: Leka Sergeeva on Shutterstock.com

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• June Inflation Lands As Expected — But Cooler Core Reading Fuels Fed Rate Cut Hopes