Inflation expectations climb to a nearly three-year high

The Federal Reserve Bank of New York's June Survey of Consumer Expectations released Tuesday showed near-term inflation expectations at their highest level since September 2023, giving the incoming Federal Reserve leadership fresh reason to keep interest rates elevated.

Americans said they now expect inflation to run at 3.7 percent one year from now, up from 3.5 percent in May, Reuters reported. Three-year expectations climbed to 3.3 percent from 3.1 percent — the highest reading since June 2022 — while five-year expectations held steady at 3 percent.

The findings sit atop a stack of hawkish signals. Fed Chair Kevin Warsh said in his first press conference last month that "I am pleased to report that members of the Federal Open Market Committee are unambiguous and unanimous: This Committee will deliver price stability," according to the Reuters account.

New York Fed President John Williams struck a slightly more optimistic note in a Tuesday television interview, saying "inflation is still too high" but adding that "I do feel a little bit more positive about the near-term inflation outlook because of the energy price declines that we're going to see." That optimism now looks premature after Wednesday's overnight oil surge.

Investors are focused on the minutes of the FOMC's June 16-17 meeting, due later Wednesday. The Associated Press inflation hub confirmed that April headline inflation reached 3.8 percent, a three-year high, and that the personal consumption expenditures index reached a fresh three-year high in May.

With the June consumer price index scheduled for release next week on July 14, the case for at least one Fed rate hike this year is building.

White House leaned on Walmart, Kroger and Albertsons over beef

Walmart's much-publicized price rollback last week did not happen in a vacuum. The Wall Street Journal reported Tuesday that an Agriculture Department official spoke with executives from Walmart, Kroger and Albertsons just days before Independence Day to "discuss the reduction of beef prices" as the holiday weekend approached — a period when demand for grilled burgers peaks. The Journal called it an unusually direct White House intervention in retail pricing.

Walmart's own price-cut list, obtained and published by CBS News, shows the extent of the promotional push.

A one-pound roll of 73 percent lean ground beef fell to $5.94 from $6.74, a 12 percent cut. Fresh sweet corn on the cob dropped to 25 cents each from 68 cents, a 63 percent cut. A 2.25-pound bag of fresh red cherries fell to $5.63 from $11.18, a 50 percent reduction. A 24-pack of Coca-Cola dropped to $9.97 from $14.97, and a 24-pack of Pepsi to $9.97 from $13.97. Great Value ice cream, Lay's chips and paper plates were also on the list.

President Trump credited his administration in a Truth Social post, but Walmart's own announcement omitted any mention of the White House and the retailer declined to comment on Trump's message, CBS reported.

"It's a win-win for both sides — Trump needs to improve his messaging around affordability ahead of the midterms, and Walmart loves to occupy the low-price spotlight," Vital Knowledge analyst Adam Crisafulli told CBS. Separately, NBC News reported that Walmart's rollout of digital price tags is intensifying consumer anxiety about so-called surveillance pricing, in which shelf tags could change price by the hour based on demand