Stagflation on the Fed’s mind

As president of the American federal reserve Jerome Powell Press conference after the meetingThe subject of prices – in particular, their impact on prices – was recurrent.

“Everyone I know provides for a significant increase in inflation in the coming months of prices because someone has to pay prices,” said Powell. “And a game will come across the final consumer.”

Admittedly, recent economic data has been optimistic, suggesting that the US economy has been able – and could still – escape the prices for the most part.

In May, a better than expected 139,000 jobs have been added And the unemployment rate was unchanged at 4.2%. Consumer feeling in early June was much more optimistic than forecasts, according to a survey by the University of Michigan. And, above all, Inflation in May – Based on the consumer price index – checked only 0.1% for the month, less than that estimated.

But this positive data chain may have to thank the slow process by which the prices move in the economy.

“It takes a while at the prices to make its way through the distribution chain at the end of the consumer. A good example of this would be the goods sold among retailers today can have been imported several months ago before the prices are imposed. So we start to see effects, and we expect to see more in the coming months,” said Powell.

And even if the officials of the Fed, at present, “do not see the signs” of the American economy weakening, Powell has recognized that growth will slow “possibly”. In other words, stagflation – the toxic mixture of higher price and slower growth – could be a possibility in the coming months.

The song “I had summer in my mind“became viral in 2022.” I had the stagflation in my mind “could be the Fed worm – and the market worm Watchers – this summer.

The American central bank holds prices, sees two discounts
The American federal reserve kept on Wednesday Interest rates in a beach between 4.25% to 4.5%where he has been since December. In addition to the rate decision, said the committee, through its “plot of points”, that two cuts at the end of 2025 are still on the table. Earlier Wednesday, President Donald Trump said that the rate of federal funds should be at least 2 lower percentage points, and again criticized President Jerome Powell, Call it “stupid”.

Inflation increases and reduces growth forecasts
Inflation in the United States, measured by the price index for personal consumer expenditure, will increase beyond 3% in 2025, according to an updated Fed forecast. The central bank had scheduled in March that the PCE reached 2.8%. The PCE came to Only 2.1% in April. The Fed also sees economic growth slow down to 1.4% this year, against a previous estimate of 1.7%. In combination, the two forecasts indicate First signs of stagflation.

Petroleum markets and prices were stable
American stocks hovered around the flat line Wednesday. THE S&P 500 Slipped 0.03%, the Industrial average Dow Jones closed 0.1% down, but the Nasdaq Composite increased by 0.13%. Likewise, oil prices have been little changed. Regional Europe Stoxx 600 hint lost 0.36%. THE FTSE 100However, accumulated 0.11% because data has shown that annual inflation in the United Kingdom is coming to a 3.4% expected in May.

Trump says he did not decided Iranian strikes
For the second time in two days, Trump Wednesday met his national security team at the White House In the middle of the Israeli-Iranian conflict. The closed -door rally took place while Trump insisted that he had not yet decided to order an American strike on Iran. On the same day, the United States ambassador to Israel Mike Huckabee said that evacuation flights and cruising ship’s departures were organized for American citizens seeking to leave Israel.

[PRO] “ Deep impact ‘on the petroleum market: jpmorgan
The current leap in petroleum prices due to the conflict simmering in the Middle East may not lead to long-term shock, according to historical data analyzed by Jpmorgan. A change of regime in Iran resulting from us or Israeli military action, however, can have one “deep impact“On the world oil market,” said the bank.

These are the collation points that make an American trade agreement

The United States and the European Union are not lacking in time to conclude an agreement on commercial prices – and analysts say that several key bonding points could make an agreement impossible.

Negotiations have been slow since the United States and the EU temporarily reduced duties to each other until July 9. If an agreement is not agreed by then, Complete reciprocal import prices 50% on EU products and the block large countermeasures are ready to enter into force.

“We are talking, but I don’t think they still offer a good deal,” Trump told journalists on Tuesday, with other hopes of an imminent agreement.

So what is the right thing between the two parties, who had a relationship value 1.68 euros (1.93 dollars billion) in 2024?