Inflation Falls, Record Bank Profits & ProShares' Simeon Hyman on SpaceX
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What is the main topic discussed in this episode?
You are tuning in to the Rich Habits Radar, our Friday episode of the Rich Habits Podcast, where every Friday morning, we're coming at you with the biggest headlines impacting you and your money. This episode is brought to you by VCX, the public ticker for private tech. My name's Austin Hankwitz, and I'm joined by my co-host, Robert Croke. And the three things sitting at the top of our rich habits radar this week include inflation experiencing its best month since the pandemic, the biggest banks on Wall Street reporting their most profitable quarter ever, and OpenAI giving the U.S. government over $40 billion of stock in their company. Be sure to stick around to the end where we chat with Simeon Hyman, global investment strategist and head of the investment strategy group at ProShares about the SpaceX IPO and what investors could expect from the company for the back half of 2026.
Robert, let's dig into our first story.
Our first story, and you heard it correctly, is inflation just had its best month since 2020. On Tuesday morning, the Bureau of Labor Statistics dropped the most important data point of the summer, and it came in way better than anyone expected. The Consumer Price Index fell 40 basis points in June, the biggest monthly decline since April of 2020. That brought the annual inflation rate down to 3.5%, a sharp deceleration from May's 4.2%, well below the 3.8% of the Wall Street consensus. Core CPI, which strips out food and energy, was flat on the month, putting the 12-month rate at 2.6%, down from 2.9% in May.
How cool is that? So CPI fell 0.4% in the month of June, the biggest monthly decline since April of 2020. The energy index fell by 5.7% in the month of June, the biggest monthly drop in over six years. This was largely driven by the U.S.-Iran ceasefire that was signed mid june that sent oil prices down roughly 25 percent over the course of the following month gasoline prices fell nine percent fuel oil dropped by more than nine percent energy relief rippled through the entire economy which is why we got such a great inflation report
And hours after the CPI print, Fed Chairman Kevin Warsh walked into the House Financial Services Committee for his first ever congressional testimony and threw cold water on the celebration. His exact words, there might be some that look at this morning's data and say, oh, mission accomplished, everything is swell, and that is not my view.
Yeah, Kevin Warsh made it very clear that the Fed's number one objective is to get monetary policy right. And the inflation surge of the last five years will be a thing of the past, according to him, but only if the Fed stays disciplined. He declined to signal of any rate cuts or rate hikes or things like that. The federal funds rate still sits between three and a half to three point seven five percent. And the futures market is actually still pricing in a 63 percent chance of a rate hike in September. However, that is down from a 75% chance before this report on inflation came out.
And here's the number that should give everyone pause. The U.S.-Iran ceasefire that drove oil down 25% in June, it collapsed. On July 7th, Iran attacked three commercial vessels in the Strait of Hormuz. And on July 8th, Trump declared the ceasefire is over. So the U.S. has been striking Iranian command centers, air defense sites, and missile capabilities every day this week. Crude oil is back above $80. Brent spiked 5% on Monday alone when Trump reinstated the shipping blockade.
Heather Long, who's a chief economist at the Navy Federal Credit Union, put it bluntly when she said, and I quote, June finally brought some relief on inflation. The concern is that this relief will be short-lived as the war in Iran restarts. It's too uncertain to know how the inflation story ends. So, Robert, we have seen a little bit of inflation relief. I think this is great. This is what the American people want. But what does it mean for them and their money?
On paper, the June CPI report is exactly what the Fed needed.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:00β4:42
2
How did June's CPI report become the 'best month since 2020' and what drove the drop in inflation?
4:42β10:02
3
Why did Federal Reserve officials caution investors despite cooler inflation data?
10:02β30:37
4
How are big banks reporting record profits and what role is AI playing in their results?
30:37β44:12
5
What does rising margin debt and concentrated market positioning mean for individual investors?
44:12β58:57
6
Why is OpenAI offering equity to the U.S. government and how could that affect AI regulation and infrastructure winners?
58:57β59:19
Speakers
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185: Is Your Financial Life Too Complicated?