The July’s data delivered a muddled picture: inflation is edging higher mainly from tariffs, with core goods seeing their fastest gains in years and import prices still climbing. Several forces are muting the full pass-through—companies are working through pre-tariff inventory, absorbing costs in margins, some tariffs aren’t live yet, and supply chains are shifting. Their model still points to inflation rising roughly 50–100 bps from a pre-April baseline, not a return to pandemic-era levels.
At the same time, the labor market is losing steam: unemployment is up 80 bps from its low, hiring has slowed, over half of industries shed jobs in July, and 34% of CEOs expect headcount cuts. With Jackson Hole in focus, the Fed faces a supply-driven inflation puzzle and a softening job market—likely holding rates while it watches the data. Regardless of the macro path, Ryan Severino expects CRE to remain in an early recovery: continued expansion would support fundamentals and risk-premium compression, while a recession would likely bring lower rates and cheaper capital from today’s relative nadir.