The Federal Reserve's Initial August Inflation Forecast Has Arrived, and It Contains a Glaring Red Flag That Can Come Back to Bite Wall Street

While the initial look at the Federal Reserve's August inflation forecast offers a bit of promise, there's a glaring red flag that Wall Street has, thus far, ignored. The silver lining: Headline inflation is expected to modestly taperThe U.S. has dealt with something of an inflation double whammy, courtesy of President Donald Trump's policies. Ignore this red flag at your own riskBut a forecast drop in headline inflation is only part of the story. The Cleveland Fed's August inflation forecast also highlights something disturbing. The price stickiness of Core PCE, even in light of a forecast decline in headline inflation, firmly leaves rate hikes on the table.