Consumers' inflation expectations, by some measures, are also the highest in decades. Inflation has been above the Fed's 2% target for over four years, and the prospect of a dovish Fed under the stewardship of a new Trump-friendly Chair could keep it that way.

Wall Street appears calm after President Donald Trump walked back his earlier threats to fire Federal Reserve Chair Jerome Powell.

Top voices on Wall Street have expressed alarm over the idea that Trump could fire Fed Chair Jerome Powell, emphasizing the need for Fed independence.

This past April, when President Donald Trump started flirting with the notion of firing Fed Chair Jerome Powell, stocks and the dollar tumbled because investors worried that even talking about such a move crossed a red line.

World shares were mostly higher on Friday after Wall Street rose to records following better-than-expected updates on the economy and a mixed set of profit reports from big U.S. companies. In early European trading,

Economic data has been somewhat mixed, with strong retail sales combined with stalled producer prices and a spike in consumer inflation in June, and a spike in consumer inflation in the same month. Investors believe the U.S. central bank will hold off on rate cuts as it weighs the inflationary impact of President Donald Trump's import tariffs.

Many on Wall Street have privately worried that political pressure will undermine the Federal Reserve’s credibility.

PepsiCo jumped 7.5% after delivering revenue and profit that topped Wall Street’s expectations. The drink and snack giant also stood by its financial forecasts given in April, which projected lower full-year profit than previous forecasts due to increased costs from tariffs and a pullback in consumer spending.

A new report shows inflation has picked up and analysts believe the prices of many goods increased, in part, because of President Trump’s tariffs. It will play into decisions by the Federal Reserve about when and whether to cut interest rates and comes as the president and his team have ramped up their pressure campaign on Fed Chair Jerome Powell.

Wall Street watches the major averages whipsaw on Wednesday, following a softer-than-anticipated wholesale inflation report and news that President Trump indicated that he will fire Fed Chairman Jerome Powell.