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Inflation just hit a 4-year low. Don’t expect price relief to last even as trade wars die down. - MarketWatch

1. Inflation rate falls to 2.3%, lowest since February 2021. 2. Temporary inflation rise expected due to sustained tariffs, complicating Fed's decisions. 3. PCE index predicted to show modest increases amidst trade tensions. 4. Economists anticipate inflation exceeding 2.5% in upcoming months. 5. Fed rate cuts anticipated by September, but not guaranteed.

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FAQ

Why Bearish?

Rising inflation and tariffs may hinder economic growth, decreasing S&P 500 attractiveness. Historical parallels include 1970s stagflation causing market volatility and downturn.

How important is it?

Significant uncertainties regarding inflation and Fed policy could influence stock market stability.

Why Short Term?

Near-term inflation impacts expected due to tariffs, influencing Fed decisions before September cuts.

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