{"id":64716,"date":"2026-07-13T12:38:19","date_gmt":"2026-07-13T16:38:19","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/feds-waller-signals-potential-rate-hike-as-core-inflation-persists\/64716\/"},"modified":"2026-07-13T12:38:19","modified_gmt":"2026-07-13T16:38:19","slug":"feds-waller-signals-potential-rate-hike-as-core-inflation-persists","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/feds-waller-signals-potential-rate-hike-as-core-inflation-persists\/64716\/","title":{"rendered":"Fed&#8217;s Waller Signals Potential Rate Hike as Core Inflation Persists"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Fed Governor Christopher Waller warned that the FOMC may need to consider a rate hike in the &quot;near term&quot; if core inflation data remains hot this week.<\/strong><\/li>\n<li><strong>President Donald Trump announced a 20% &quot;reimbursement&quot; fee on all cargo transiting the Strait of Hormuz, citing the need to fund U.S. naval security in the region.<\/strong><\/li>\n<li><strong>U.S. Strategic Petroleum Reserve (SPR) levels fell by 3 million barrels to 316.5 million, the lowest inventory level since 1983.<\/strong><\/li>\n<li><strong>The Canadian federal government and Alberta province signed a landmark MOU with the Oil Sands Alliance to advance the Pathways Carbon Capture and Storage (CCS) project.<\/strong><\/li>\n<li><strong>A federal judge referred President Trump\u2019s attorneys for disciplinary action, ruling that his lawsuit against the IRS was filed for an &quot;improper purpose.&quot;<\/strong><\/li>\n<\/ul>\n<h2>Fed Policy at a &quot;Crossroads&quot;<\/h2>\n<p>Federal Reserve Governor <strong>Christopher Waller<\/strong> delivered a hawkish signal on Monday, stating that the U.S. central bank is at a &quot;crossroads&quot; regarding its next policy move. Waller emphasized that while headline inflation may decelerate, he is increasingly concerned about the <strong>elevated pace of core inflation<\/strong>, which rose to <strong>3.4% in May<\/strong>. He noted that if this week&#39;s inflation reading shows another &quot;hot&quot; result, the Fed will likely need to discuss raising interest rates rather than maintaining the current pause.<\/p>\n<p>Waller clarified that the labor market is no longer a primary source of inflationary pressure, describing it as stable and close to the Fed&#39;s <strong>maximum-employment goal<\/strong>. However, he cited upward pressure from <strong>tariffs, energy prices, and the massive buildout of AI infrastructure<\/strong> as persistent risks. To feel confident that inflation is returning to the <strong>2% target<\/strong>, Waller stated he would need to see &quot;several months&quot; of lower core readings.<\/p>\n<h2>Geopolitical Tensions and Shipping Levies<\/h2>\n<p>Global trade faced a new shock as <strong>President Donald Trump<\/strong> announced via social media that the U.S. would impose a <strong>20% fee on all cargo<\/strong> traversing the <strong>Strait of Hormuz<\/strong>. Trump characterized the United States as the &quot;Guardian of the Hormuz Strait&quot; and argued that the U.S. must be reimbursed for the costs of maintaining a naval blockade and securing the waterway against Iranian threats.<\/p>\n<p>The <strong>International Maritime Organization (IMO)<\/strong>, the UN&#39;s shipping agency, responded by stating there are no legal grounds for mandatory tolls on international straits. Market analysts warned that a 20% charge on cargo value would dwarf traditional canal tolls, potentially leading to a massive spike in global energy and shipping costs. <a href=\"https:\/\/stockmarketwatch.com\/energy\/crude-oil\" data-internallinksmanager029f6b8e52c=\"12\" title=\"Crude oil\">Oil prices<\/a> reacted immediately, with <strong>Brent<\/strong> and <strong>WTI<\/strong> crude trending higher as traders assessed the risk of prolonged disruption in the Persian Gulf.<\/p>\n<h2>Energy Reserves and Climate Initiatives<\/h2>\n<p>The U.S. energy landscape remains strained as the <strong>Strategic Petroleum Reserve (SPR)<\/strong> dropped to <strong>316.5 million barrels<\/strong>, its lowest level in over four decades. The 3-million-barrel decline comes amid ongoing efforts to stabilize prices during the Middle East conflict. Experts warned that frequent drawdowns have caused significant <strong>wear-and-tear on the reserve&#39;s infrastructure<\/strong>, potentially limiting the government&#39;s ability to respond to future supply shocks.<\/p>\n<p>In Canada, a major step toward decarbonization was reached as the federal government and Alberta province signed a memorandum of understanding with the <strong>Oil Sands Alliance<\/strong>. The agreement supports the <strong>Pathways Carbon Capture and Storage (CCS) project<\/strong>, which aims to store <strong>6 million tonnes of CO2 per year<\/strong> by the mid-2030s. Member companies involved in the pact include Canadian Natural Resources (<a href=\"\/stock\/CNQ\">CNQ<\/a>), Suncor Energy (<a href=\"\/stock\/SU\">SU<\/a>), Cenovus Energy (<a href=\"\/stock\/CVE\">CVE<\/a>), Imperial Oil (<a href=\"\/stock\/IMO\">IMO<\/a>), and ConocoPhillips (<a href=\"\/stock\/COP\">COP<\/a>).<\/p>\n<h2>Legal Setback for Trump<\/h2>\n<p>On the legal front, <strong>U.S. District Judge Kathleen Williams<\/strong> issued a scathing ruling against President Trump\u2019s lawsuit against the <strong>Internal Revenue Service (IRS)<\/strong>. The judge determined the suit was filed for an &quot;improper purpose&quot; and referred the President&#39;s attorneys for <strong>disciplinary action<\/strong>. The ruling described the litigation as an attempt to use the court to legitimize a settlement that would have provided tax audit immunity and billions of dollars in compensation to the President&#39;s affiliates.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Fed Governor Christopher Waller warned that the FOMC may need to consider a rate hike in the &quot;near 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