Central Banks in Focus as Growth Signals Diverge

In the monetary sphere, tensions persist over the relationship between President Donald Trump and the Federal Reserve. Conflicting reports about a possible intention to remove Fed Chair Jerome Powell from office have created uncertainty in the markets and limited the rise in long-term yields. Trump has renewed his push for lower interest rates, and any future appointment he makes to lead the Fed is expected to reinforce a more accommodative stance within the FOMC. This raises long-term inflation risks and fuels fears that the Fed could lose control over the long end of the yield curve.

At the same time, the US administration announced that letters will be sent to more than 150 countries informing them of their respective tariff rates. Trump anticipated that these tariffs will likely be in the range of 10% to 15%, in line with market expectations prior to the recent announcements. In June, annual inflation in the United States accelerated for the second consecutive month, reaching 2.7%, the highest level since February, in line with market expectations. In monthly terms, the consumer price index (CPI) rose 0.3%, marking its largest increase in five months, driven mainly by higher housing prices (+0.2%) and gasoline (+1%).

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