July CPI, PPI, Cardinal Health: Week Ahead
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- July CPI and PPI reports (Wednesday and Thursday) are the week's marquee data, with economists forecasting 3.4% year-over-year headline CPI and 2.5% core CPI, plus 0.1% headline and 0.3% core PPI month-over-month gains per FactSet consensus.
- Treasury Secretary Scott Bessent said early last week a deal on the Iran war 'may be coming,' but no deal materialized — the article notes markets will need further confirmation to sustain Bessent-fueled optimism.
- Fed Governor Lisa Cook identified the AI data center buildout as a separate inflationary force beyond energy, citing price increases in chips, high-tech equipment, software, utilities, copper, and labor; she said inflation risks now outweigh employment risks and she is 'prepared to act' on a rate hike.
- Friday's July nonfarm payrolls showed a loss of 23,000 jobs versus an expected gain of 83,000, with unemployment ticking down to 4.1% and the participation rate falling to a multiyear low of 61.4% — softening wage inflation alongside the headline miss.
- Fed Chair Kevin Warsh counters Cook, arguing that once AI proliferation ramps up, the resulting productivity growth will keep inflation low, setting up a debate inside the Fed over how to weigh the AI capex cycle.
- Cardinal Health reports fiscal 2026 fourth-quarter earnings Tuesday with LSEG consensus revenue of $65.03 billion and EPS of $2.42, trading within 1.5% of its all-time high after peers Cencora and McKesson beat and raised full-year guidance.
Why it matters: Fed Governor Lisa Cook said she's 'prepared to act' on a rate hike after flagging AI-driven inflation, but Friday's 23,000-job loss (versus expected +83,000) creates a conflicting-signal bind. Markets pricing in rate relief face fresh uncertainty, while Cardinal Health — within 1.5% of its all-time high — has no margin for a guidance miss after peers Cencora and McKesson raised the bar.
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