Trumpflation Hits New Stage, Fueling Stock Market Crash Concerns

Despite a recent dip in headline U.S. inflation, Wall Street faces a double whammy of rising prices and increased pressure on the Federal Reserve to act.

The Iran war has driven energy commodity prices up by nearly two percentage points since February, pushing trailing 12-month inflation from 2.4% to a three-year high of 4.2%, before easing back down to 3.5% in June.

However, core personal consumption expenditures (PCE), which exclude volatile food and energy costs, remain sticky at around 3.33%, suggesting that Trumpflation has entered a new stage with inflationary pressures spilling beyond the energy sector.

The cost of petroleum-based products such as plastics and synthetic polymers has risen due to rerouting shipments through alternative routes following the Strait of Hormuz shutdown, further exacerbating price pressures.