1540 ET - Economist Stephen Stanley of Santander notes a paradox in the relationship between inflation data and Fed rate cuts. Fed officials want to be assured that price increases from tariffs are temporary, not embedded. Therefore, to cut rates, they will want to see prices react to tariffs, and then calm again. Because that path necessitates an initial inflation spike, rate cuts may happen sooner the faster that companies raise prices in response to tariffs. "The longer companies hold off before hiking prices, the later the return to normal inflation will be and thus the later Fed easing may come," he writes. Stanley pencils in 0.3% for both headline and core CPI inflation in June. Data come at 8:30 a.m. ET Tuesday. ( matt.grossman@wsj.com, @mattgrossman)

(END) Dow Jones Newswires

July 14, 2025 15:40 ET (19:40 GMT)

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