The serenity that is expressed on the market is supported by the moderate evolution of inflation in the United States. Admittedly, annual increases accelerated, from 2.4% in May to 2.7% in June for the general index and from 2.8% to 2.9% for the out -of -energy and food index, but there is a long sequence of moderate monthly variations since February. In addition to 2.3% over twelve months, the production price index displays a zero monthly variation in June. Despite the withdrawal of the dollar, the import price index, calculated before taxes, displays a decline of 0.2% in annual sliding, which suggests that the margins of companies exporting to the United States are under pressure and that the “tariffs” imposed by the United States are partially absorbed by foreign firms.
Although reassuring, the figures listed above should not question the wait-and-see reserve (Fed). Price adjustment is never immediate, but it materializes with a certain delay in the event of the renewal of inventories. A few days before the deadline of 1is August, the risks affecting prices clearly lean in the direction of at least temporary acceleration of inflation.
Critical developments are generally favorable. The retail rebound in June, up 0.6% over a month and 3.9% in annual shift, shows that hedonism of American households persists. Although modest, the progression of the consumer confidence index of the University of Michigan (61.8 in July after 60.7) confirms the embellished observed in June. The manufacturing sector pursues an inex dynamic expansion (0.1% monthly, 0.8% in annual sliding). A reflux of unemployment compensation requests (221,000, at the lowest since April) and a modest embellishment of the conditions of the residential real estate sector completes a happy table.
The recent news and the signals issued by the president of the Fed, Jerome Powell, and the majority of his colleagues from the Monetary Policy Committee (FOMC) leave no room for doubt. The Fed will not change its key interest rate on July 30, even if Christopher Waller pleaded the cause of 25 basic points on Friday. His speech emphasizes labor market, where symptoms of slowdown in the private sector have started to emerge. As for the prices, the governor provides for modest adjustments, the effects of the inflation rate should be faded.
This opinion could impose itself later, when the Fed will have additional data. For the time being, it reflects the opportunism of a candidate for the succession of Jerome Powell whose mandate will end at the latest in May 2026, even earlier if Donald Trump manages to identify a “fair reason” to accelerate the transition.
Whatever happens, the independence of the FOMC does not seem to be threatened even if the president manages to impose a docile person, listening to the claims of the White House. Even by retaining this hypothesis, Jerome Powell’s successor will have to deal with a committee made up of 12 people with the right to vote during monetary policy meetings.