Markets are bracing for the July CPI report, due Tuesday, with expectations of a modest 0.2% month-on-month rise in headline inflation and 0.3% for core. That’s tame enough for the 'nothing to see here' crowd to argue tariffs haven’t bitten yet. But this is likely just the beginning. We’re in a transitional phase. Inventories of big-ticket items—cars, appliances, electronics—are still being sold at pre-tariff prices. Once those are cleared, the full force of tariffs will begin to show. We expect inflation readings of 0.4% month-on-month to become more common, possibly even higher. That’s when the market narrative ... (full story)