Kevin Warsh's Fed Faces Split Verdict on Inflation Data: Sahm Notes 'Good News,' Schiff Says Calls Out 'Misleading' CPI Rise

The July consumer price index (CPI) report sparked differing opinions among economists. Former Fed economist Claudia Sahm viewed the data as a positive sign, suggesting that inflation is moving in the right direction, which supports the Fed's stance. Sahm highlighted that supercore inflation, excluding housing, rose just 0.2% in July, indicating a narrowing breadth of price increases and calling it the best news in the report.

The overall CPI rose 3.4% year-over-year in July, down from June's 3.5%, while core CPI eased to 2.5% annually from 2.6%. However, economist Peter Schiff criticized the report, arguing that the way energy prices are captured creates a lag effect due to oil and gasoline starting the month at depressed levels before rebounding sharply.