Kevin Warsh's Fed Faces Split Verdict on Inflation Data: Sahm Notes 'Good News,' Schiff Says Calls Out 'Misleading' CPI Rise

Radhika Anilkumar Nadig

Sun, August 16, 2026 at 12:31 AM GMT+3 7 min read

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

July's consumer price index (CPI) report drew conflicting interpretations from economists on Wednesday, as the same data was read as a sign of disinflation, a case against current Fed policy, and grounds to question the numbers themselves.

The Case for Disinflation

For former Fed economist Claudia Sahm, the report continued to build the case that inflation is moving in the right direction.

Implications for the Fed: good news. Disinflation, even as the Fed's been on hold so far this year, supports its stance. It's too soon to say whether a hold will be appropriate in September—more data coming—but the chances of a hike edged down some today.

— Claudia Sahm (@Claudia_Sahm) August 12, 2026

Don't Miss:

A single bad hire can set a startup back years. Here are the 5 hires founders most often misjudge — and why
Still Learning the Market? These 50 Must-Know Terms Can Help You Catch Up Fast

She noted that supercore inflation, or non-housing core services, rose just 0.2% in July, well below the pace seen earlier in the year, and called the narrowing breadth of price increases "the best news in today's report."

The breadth of inflation narrowed in July, reducing one of the risks the Fed is monitoring. The share of the CPI basket with prices rising 5%+ fell in July and is back to the average levels in 1997-2005, when inflation was close to 2%. This may be the best news in today's report! pic.twitter.com/1zhFBJbdko

— Claudia Sahm (@Claudia_Sahm) August 12, 2026

The CPI rose 3.4% year-over-year in July, in line with economists' estimates and down from June's 3.5% increase, while core CPI eased to 2.5% annually from 2.6%.

Still, she cautioned that two months of data isn't enough to confirm the trend, with Thursday's Producer Price Index report set to shape the outlook for the Fed's preferred gauge, the PCE index.

Market strategist David Rosenberg echoed that read, saying price pressure has narrowed to a handful of categories, such as computers, airfares and used cars, while showing little movement elsewhere.

He added that inflation skeptics, including the Fed's three dissenting officials, will eventually be forced to change their tune as the disinflation trend builds.

The core CPI is running at the grand total of a +1.6% annual rate over the three months to July. The comparable this time last year was +2.7%. Inflation did show up last month in computers (thanks Apple!), airfares, toys, appliances, and used cars. But it didn't show up anywhere…

— David Rosenberg (@EconguyRosie) August 12, 2026

Skepticism Over What the Data Captured

However, Veteran economist Peter Schiff called the print "misleading", saying the way energy prices are captured created a lag effect, since oil and gasoline started July depressed before rebounding sharply, adding that the print still reflects May's collapse rather than July's rally.

July's 0.1% CPI rise is misleading. Energy prices fell because CPI compares monthly average prices. But oil and gasoline rose sharply during July after starting the month at depressed levels. That means July CPI still reflects May's oil price collapse, not July's sharp rebound.

— Peter Schiff (@PeterSchiff) August 12, 2026

Charlie Bilello, chief market strategist at Creative Planning, said inflation has run well above the Fed's 2% target since January 2020, calling the gap "a massive failure of monetary policy."

The Fed spent years telling us 2% inflation was the goal.
But since January 2020, CPI has risen at a 4.0% annualized rate and is now 13% above a 2% inflation trend.
That's not "price stability." It's a massive failure of monetary policy. pic.twitter.com/WINJUdTkLA

— Charlie Bilello (@charliebilello) August 12, 2026

The Fed is Too Tight

James Thorne, chief market strategist at Wellington Altus, said the Fed's benchmark rate remains above the neutral level needed to keep the economy balanced, even as rate-sensitive sectors such as housing and business investment are already showing strain from tight policy.

He said the case for keeping rates restrictive amounts to little more than "institutional inertia dressed up as vigilance," calling it "pathetic.

Pundits Dodge the Obvious: The Fed Is Too Tight.
Today's CPI discussion produced the usual quantity of noise and virtually no monetary analysis. Pundits parsed decimal points, recycled tariff anxieties, and treated every monthly price movement as though it were a revelation. Yet…

— James E. Thorne (@DrJStrategy) August 13, 2026

With inflation expectations contained, Thorne argued, "the sensible default is for the funds rate to sit at neutral, not above it."

Sahm's own outlook pointed in a similar direction, saying the data supports the Fed's decision to hold rates steady so far this year, with the odds of a hike edging down slightly following the report.

What it Means for Markets

Economist Mohamed El-Erian tied the report to bond market moves, saying elevated Treasury yields have less to do with inflation or Fed policy and more to do with the heavy supply of government and corporate debt ahead.

Today's Treasury price action, which followed a benign CPI print and moderating rate-hike expectations, supports the view that the "high" level of yields is less about inflation and/or Fed concerns, and much more about the heavy weight of upcoming government and corporate debt… pic.twitter.com/7HErfwSf8C

— Mohamed A. El-Erian (@elerianm) August 12, 2026

Photo courtesy: Rawpixel.com / Shutterstock.com

Read Next: Think you're saving enough for your kids? You might be dangerously off — see why

Building Wealth Across More Than Just the Market

Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That's why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn't tied to the fortunes of just one company or industry.

Arrived

Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. Investors can buy fractional shares of single-family rentals and vacation homes starting with as little as $100. This allows everyday investors to diversify into real estate, collect rental income, and build long-term wealth without needing to manage properties directly.

Realberry

Institutional-quality real estate has traditionally been difficult for individual investors to access. Realberry gives accredited investors direct access to private real estate opportunities backed by a team with 35 years of experience, $3.4 billion in assets under management, and $481 million in cumulative distributions paid to investors as of Q4 2025, according to the company. With a portfolio spanning 13 million square feet across seven U.S. states, Realberry focuses on acquiring, developing, and managing real estate with an emphasis on long-term value creation while its principals often invest alongside clients to help align interests.

FarmTogether

Farmland has historically held its value through market volatility and delivered returns uncorrelated to stocks and bonds. For accredited investors, FarmTogether offers direct access to high-quality U.S. farmland starting at $15,000 — fully managed, with no landlord headaches.

Fundrise

Private real estate and private credit can add income and stability to a stock-heavy portfolio. Fundrise offers access to diversified private real estate and credit strategies through an easy-to-use platform, with professionally managed portfolios designed to generate passive income and long-term growth.

Mode Mobile

Mode Mobile is changing the way people interact with their phones by letting users earn money from the same apps and activities they already use every day. Instead of platforms keeping all the advertising revenue, Mode Mobile shares a portion back with users who engage with content, play games, and scroll on their devices. Named one of Deloitte's fastest-growing software companies in North America, the company has built a large beta user base and is scaling a model that turns everyday smartphone usage into a potential income stream.

EquityMultiple

For accredited investors looking beyond stocks and bonds, EquityMultiple provides access to vetted commercial real estate deals starting at $5,000, with only ~5% of opportunities passing their due diligence process.