A New Goldilocks? Strong Retail Sales, Falling Prices and a Fed That May Just Sit Still

Two business-news segments this week arrived at nearly the same conclusion from opposite directions: American consumers are spending at a pace that would normally worry inflation hawks, and prices fell anyway. That combination has revived a word Wall Street had mostly retired — Goldilocks — and it has shifted the argument about the Federal Reserve from whether to cut to whether to do anything at all.

The retail sales number, two ways

In a commentary segment carried on YouTube (video ID VhlsqM_hFdE), the host framed June's report as the third leg of a good week, following what he described as "two great inflation numbers where the level of both consumer and producer prices actually declined in June," reported Tuesday and Wednesday. On retail sales, he cited core sales rising "8% at an annual rate over the past 3 months," with non-store retailers — online — up 1.9% in June, 1.4% in May and 1.5% in April, which he calculated as "21% at an annual rate for the last 3 months." He also said car sales are "up over 20% annually in the second quarter" and pointed to two booming regional manufacturing reports out of New York and Philadelphia.

A Fox Business panel discussion (video ID LKOT6QWkrIQ) reported the same release with a different cut of the data. There, an analyst identified on air as Taylor said seven of 13 categories posted gains; gas station receipts fell 5%, described as the biggest decline since 2022, on average national pump prices falling 50 cents a gallon; and non-store retailer receipts "jumped almost 2%, the biggest increase in a year, maybe in part because Amazon had their Prime Day event." She added that motor vehicles and parts dealers saw their largest increase since July 2025, and that spending at restaurants and bars rose.

Crucially, that panel put the control group — described on air as "the factor into GDP" — at 9.2% on an annualized rate. The panel paired that with CPI "showing just a 0.4% increase excluding food, energy, and used vehicles, which means the majority of this is real consumer spending." The real, inflation-adjusted retail sales gain was given as 1.1%, and the ex-gasoline real gain as "8/10 of a percent."

The two accounts do not contradict each other so much as measure different things: 8% annualized over three months versus 9.2% annualized for the control group in a single month. Anyone comparing the two should note they are not the same series. Neither segment cited the Census Bureau release directly on air, and the underlying government figures were not independently verified for this account.

'The Phillips curve is dead'

The commentary segment made the theoretical claim explicit. "My new Goldilocks definition is rapid economic growth combined with stable or even disinflating prices," the host said. "That is the Phillips curve is dead. There's no trade-off between growth and inflation, or between jobs and inflation." He attributed the pattern to a supply-side, technology-driven productivity surge — "AI, quantum computing, advanced manufacturing, space tech breakthroughs" — with "surging productivity, which is output per person" holding down business costs and consumer prices. He compared it to the 1990s, said "weekly initial unemployment claims are rock bottom," and credited "pro-growth fiscal and monetary policy, including a strong dollar and a new regime at the Fed, and lower taxes and lighter regulations from the White House." That is an interpretive argument, not a data point, and it is worth separating from the numbers that precede it.

A Fed that may simply hold

The Fox Business segment included an exchange with President Trump, who was asked whether he would be okay with the Fed pausing rates for the rest of the year. "Well, it's better than raising them," he said, before adding, "I mean, I'd like to see them go down. I'd like to see our country have the lowest rate anywhere in the world." On oil, he said prices are "going to be a little bit of a yo-yo for a while" and that "when this is over, oil is going to drop like a rock."

Panelists read the restraint as significant. One argued the softened tone signals that Trump "really trusts" Kevin Warsh, adding: "It doesn't tell me that Warsh is his puppet. He's not." The same panelist said Warsh's comments that week and his reaction to the latest inflation data showed he was not Trump's puppet. Another panelist noted that Fed Governor Christopher Waller had said in a Monday speech, "I might consider raising rates if the number is bad." The panel's own base case: the Fed can hold rates steady now and wait on inflation data, with "maybe you get room for a cut end of 2026, early 2027."

The counterweight nobody is celebrating

The Fox Business discussion also supplied the argument against euphoria. Interest on the debt is averaging "a hundred and almost a hundred and seventeen billion dollars every month," the panel said, totaling over a trillion dollars in a nine-month period and running 14% higher than the previous year. Roughly a third of the debt rolls over in a year or less, which the panel framed as a structural reason the Fed cannot raise rates — "any move up in interest rates, you could have the national debt top Social Security." One panelist added that almost half of personal income taxes collected equal what is paid in interest on the debt. On housing, the 30-year mortgage was reported at 6.55%, up from 6.49% a week earlier but below 6.75% a year ago.

Oil is the other open variable, and the coverage does not line up cleanly. The Fox Business segment described oil holding under $80 a barrel as the US and Iran traded strikes for a fifth straight day. A separate Bloomberg segment, broadcast on a Monday, discussed Brent around the $90 level after a ninth consecutive night of US strikes on Iranian targets — the program described Brent at one point as having "just dipped below $90 a barrel" and later as "back above $90," noting oil was "just over 70 bucks a barrel at the start of the month."

Victor Schvets, head of global desk strategy at Macquarie Capital, told that Bloomberg program the Fed would "look through" the war, citing "increasing disinflation occurring in the US and globally both at the PPI level and CPI," and said he did not "really expect any tightening" — arguing the Fed would switch between dovish and hawkish rhetoric "without actually changing either interest rates or the QE policy." He allowed that if oil escalated and "stays at 90, $100, $110," that would produce "another spur of inflation" and put "at least one tightening if not two tightening cycles" on the table. But he was explicit that this was not his base case: "chances of any meaningful tightening are actually low. In fact we might be talking about easing."

What this signals

The honest read is that the June data are genuinely strong and the interpretation is contested. Falling headline prices driven partly by a 50-cent drop in gasoline are not the same as durable disinflation, and one panelist made that point directly: the increase has stopped, but "you need several more months before you start getting really good prints where you're moving back to that 2% down."