| For President Donald Trump, Treasury Secretary Scott Bessent, and everyone else eager to see interest rates come down fast, today’s inflation data was a step in the wrong direction. Prices charged at the wholesale level rose in July by the most in three years, and largely for a reason the White House will like even less — margins surged, suggesting companies are passing along higher import costs related to tariffs. That’ll make matters much more complicated for officials at the Federal Reserve, who seem inclined to cut rates to support a slowing labor market, but don’t want inflation to rear back up again. “Tariffs are causing businesses to raise the prices they charge each other, which will show up in higher consumer prices over time,” said Bill Adams, chief economist for Comerica Bank. “The report is another pebble on the scale against a rate cut at the Fed’s September meeting.” The data lends some credence to a report from Goldman Sachs that seemed to irk Trump earlier this week. The bank’s economists forecast that consumers will increasingly bear the brunt of Trump’s tariffs, which will push up the Fed’s preferred inflation gauge to 3.2% by year-end, from 2.8% in June. After Thursday’s report, several economists said they project the measure to edge up to 2.9% when July data is released later this month. The Fed will have that data in hand, plus more on employment, before they meet in September. Granted, the pass through hasn’t shown up too strongly in the consumer price index yet — if anything, July’s increase in the core CPI, which excludes volatile food and energy prices, was more due to services than goods. That gave traders confidence that the Fed will cut rates next month — even with today’s data — but nowhere near as much as Trump wants or Bessent has suggested. To get cuts of the magnitude they’ve floated, the job market would have to be a lot worse. The August employment report is due Sept. 5, and will be soon followed by a highly anticipated initial estimate of annual payroll revisions — which has drawn Trump’s ire in the past. “The upcoming jobs data will weigh more heavily in the Fed’s decision making than this inflation report,” Adams said. — Molly Smith | 
