Stagflation on the Fed’s mind

In the chairman of the federal reserve system Jerome Powell Press conference after meetingThe topic of tariffs – in particular, their impact on prices – was repeated.

“Everyone I know is predicted by a significant increase in inflation from tariffs in the coming months because someone has to pay for tariffs,” Powell said. “And some of them will fall on the end of the consumer.”

Of course, recent economic data was optimistic, suggesting that the US economy was able – and can still avoid tariffs in the mostly intact.

In May, better than expected 139 000 jobs were added And the unemployment rate was unchanged at 4.2%. Consumer feelings in early June According to Michigan’s poll, it was much more optimistic than the forecast. And, most importantly, most importantly, Inflation in May – Based on the Consumer Price Index – marked by only 0.1% per month, lower than calculated.

But this string of positive data can thank the slow process, through which the tariffs are moving in the economy.

“It will take some time to make the tariffs make it through the distribution chain to the final consumer. A good example of what will be sold for sellers today may have been imported a few months ago before tariffs were imposed. So we start seeing some consequences and we expect to see more in the coming months.”

And despite the fact that nowadays the Fed officials “do not see the signs” of the US economy, Powell acknowledged that the growth will slow down “after all.” In other words, Stagflation – a toxic mix of higher prices and slow growth – can be the opportunity in the following months.

The song “I got the summer in my head“Viral went in 2022.” I got stagflation on your mind, “it can become the Fed – and the market columnist” – Earworm this summer.

The US Central Bank has rates, seeing two cuts
The US Federal Reserve on Wednesday is preserved Interest rates in range from 4.25%-4.5%Where it was from December. Along with the decision, the committee noted, through it carefully watching the “point section”, that two cuts by the end of 2025 are still on the table. Earlier on Wednesday, President Donald Trump said calling it “stupid.”

Hiking that falls inflation and reduce growth forecasts
Inflation in the United States, measured according to the cost of personal consumption prices, will grow 3%in 2025, according to the updated Fed forecast. In March, the Central Bank hoped that PCE reached 2.8%. PCE came in Just 2.1% in April. The Fed also sees that this year economic growth slows down to 1.4%, which is 1.7%compared to an earlier estimate. In combination, both forecasts indicate Early signs of stagflation.

Markets and oil prices were we equal
American stocks hovering around a flat line on Wednesday. A S&P 500 slipped 0.03%, Dow Jones Industrial Medium closed 0.1% down but Nasdaq Composite increased by 0.13%. Oil prices also changed little. Regional Europe Stoxx 600 index lost 0.36%. A FTSE 100However noted 0.11%because the data showed that the annual inflation in the UK Expected 3.4% in May.

Trump says he has not decided on Iran’s blows
A second time in two days Trump on Wednesday met with a national security team at the White House Among the conflict of Israel and Iran. The closed door collected when Trump insisted that he had not yet decided whether the US strike on Iran should be ordered. On the same day, US Ambassador to Israel Mike Hakababi said the evacuation and trips on cruise ships were organized for American citizens seeking to leave Israel.

(Pro) “Deep impact” on the oil market: jpmorgan
The current jump in oil prices due to a boiled conflict in the Middle East may not lead to a long-term price shock, according to historical data analyzed Jpmorgan. However, the change of regime in Iran resulting from the US or Israeli hostilities may have “deep impact“In the global oil market, the bank said.

These are noticeable points engaged in the US-EU trading transaction

In the US and the European Union, there is not enough time to make a transaction on trading tariffs – and analysts say several key points can make the agreement impossible.

Negotiations are slow because both the US and the EU are temporarily reduced to each other by July 9. If not yet agreed Full mutual tariffs on imports 50% on EU goods and block Widely describes countermer Installed to take effect.

“We are talking, but I do not feel that they still offer a fair business,” Trump told reporters on Tuesday that even more evil hopes for a quick agreement.

So that keeps things between the two parties that had a relationship worth 1.68 trillion euros ($ 1.93 trillion) in 2024?