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Ben Emons predicts inflation will not moderate but climb higher, citing tariffs and energy costs as drivers and urging investors to watch Fed policy and
Ben Emons, founder of FedWatch Advisors, warned that U.S. inflation “is not going to moderate. It is going higher” as tariffs and energy prices continue to weigh on price pressures, signalling a likely continuation of the Federal Reserve’s hawkish stance and prompting market participants to reassess risk‑on positions【1】.
| At a glance | |
|---|---|
| Inflation outlook | Rising, not moderating【1】 |
| Fed policy expectation | Remain hawkish amid higher inflation【1】 |
| Market implication | Selective tech names such as IBM seen as value【1】 |
| Key driver cited | Tariffs and energy costs keeping price pressures elevated【1】 |
Emons pointed to two primary contributors to the upward pressure on consumer prices: ongoing tariff measures and volatile energy markets. He argued that these factors are likely to sustain inflation above the Fed’s 2 % target, reducing the probability of a rate‑cut cycle in the near term. While he did not provide a specific inflation rate, his assessment aligns with recent data showing energy‑related price components remaining elevated, a trend that analysts have flagged as a drag on any near‑term moderation.
In response to Emons’ commentary, investors have begun to tilt toward sectors perceived as defensive or undervalued. He highlighted technology stalwarts such as IBM as offering “value” amid broader equity volatility, suggesting that quality‑focused names may outperform as the Fed maintains tighter monetary policy. No immediate price moves were reported, but the emphasis on selective tech underscores a shift away from growth‑heavy stocks that are more sensitive to higher rates.
Emons’ warning raises a pivotal question for policymakers and investors: if inflation indeed accelerates, how long can the Fed sustain a hawkish posture without triggering a sharper economic slowdown? The answer will hinge on forthcoming data and the Fed’s willingness to balance price stability against growth concerns.
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AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 2 outlets · Jul 21, 2026 · How we report
Inflation is caused by increases in the money supply, fluctuations in the demand for goods and services, supply shocks such as energy crises, and changes in inflation expectations. Significant decreases in interest rates set by central banks can also contribute to the rise of inflation.
Inflation is measured using a price index, most commonly the consumer price index (CPI). This index tracks the annualized percentage change in the general price level of goods and services.
Moderate inflation can reduce unemployment by allowing for nominal wage rigidity and provides central banks with greater flexibility in monetary policy. It also encourages loans and investment rather than the hoarding of money, while helping to avoid the inefficiencies associated with deflation.
As of August 2024, inflation is contributing to higher interest rates on U.S. government debt, which has surpassed $40 trillion. These economic conditions have created political pressure, as the administration faces challenges in balancing growth objectives with the need to manage debt and deficit levels.