White House's inflation claim

Kevin Hassett says three-month annualized core CPI hit 2% target, but year-over-year figure remains elevated

“If you look at the last three months, that core CPI averaged and then annualized is 0.2. I mean top line is 0.2 and core is two, which is the target”

Market reaction

SPY down 2.44% this month while up 11% year to date, with NVIDIA and Apple dominating the index

Fed's preferred measure

Core PCE index rose 0.2% in July to 130.66, still above Fed's 2% target

Short-term volatility

Three-month annualized CPI readings can flip quickly with energy prices or shelter trends

Hassett's position

Hassett suggests inflation is slowing but avoids direct recommendation on Fed rate decisions

“So if you look at the sort of near term memory in the stochastic process that drives inflation, then you could see that things are slowing down”

Market implications

Near-flat yield curve and slowing consumer spending could compress equity multiples with next Fed move

Policy rate context

Fed policy rate at 3.75% since early 2026, with 10-year minus 2-year Treasury spread at 0.33%

Bull vs bear case

Bull case: sustained inflation cooling could boost equity multiples; bear case: hike into slowdown compresses multiples