Bloomberg Surveillance · Wednesday, July 29, 2026
The direction of inflation in the second half of the year is closely tied to oil prices, with potential shocks from tariffs and oil impacting the Federal Reserve's decisions. While the Fed may try to look through short-term oil price swings, persistent increases could lead to higher inflation expectations and potential rate hikes.
“I mean, to me right now comes down to what's happening. I ran right, and so whether or not the Fed hikes or whether or not inflation accelerates, to me, that's an oil story right now. Even though they say they're going to look through that. When you have tariffs and oil two shocks, I think that makes the story a bit more. Difficult for them.”
“But if you reintroduce this story, you know, I think you're seeing increasing risk that at the September meeting and beyond you are a hiking cycle. I think that's what the FED is telling you.”
“Yes, and all those equal. They're going to look through terraces, they're going to look through energy. But the more that this goes on, the more that bleeds into inflation and expectations.”