Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news and analysis.

Good afternoon, today is Thursday, July 11th, and I'm your host Kim Khan. Our top story so far.

It's all about inflation or disinflation to be precise. The June-CPI numbers may just be the report that breaks the Hawks backs. The consumer price index

index unexpectedly fell 0.1% last month compared with expectations for a 0.1%

rise.

It was the largest monthly decline since May 2020. That brought the annual

CPI back down to 3%, more than 6% percentage points below its high in June 2022.

The core

CPI, which excludes food and energy, rose 0.1%, softer than the forecast for a 0.2% rise.

At 0.6%, the rise was a hair's breadth of being rounded down to no change.

The annual rate dropped to 3.3 percent, the lowest level since April 2021.

There was broad-based disinflation in the report, including in shelter.

Eric Merlez, co-head of global markets at Citizens, says,

if the dual trends of a weakening labor market and lower inflation continue,

it will likely put the first rate cut in years firmly on the

table for the FOMC September gathering. Fed Funds futures are now pricing in an 80%

chance of a September cut, with another November cut now in play play and a near certainty of two cuts by year

end. But Skyler Wyanne, Chief Investment Officer Reagan Capital, warns that investors are

underestimating the risk that the Fed raises interest rates in the near term.

If we were to see a few back-to-back readings that show a re-acceleration in inflation,

the Fed's next move might be an interest rate hike,

as Main Street is getting pummeled from high prices.

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