The surge in prices that many expected from the duties did not arrive. But American inflation – months after the entry into force of the universal and sectoral rates decided by Donald Trump – begins to give signs of tension by further increasing the pressure on the Fed, to which the American president continues to ask for a cut of interest rates of three points. Consumer prices in June rose to 2.7%, above 2.4% in May and beyond the market forecasts.
The increase on a monthly basis was 0.3%, the largest since January. The core index, net of energy and food, however climbed compared to May of 0.2%, less than the expectations for the fifth consecutive month. The prices contained was the drop in cars, while the most exposed assets at Trump rates have increased at a speed for years for years. The rise in June – according to observers – indicates that companies are starting to download the duties on consumers and this suggests further increases in the coming months, when the stocks made before the announcement of the rates will also be exhausted.
Despite acceleration, investors are convinced that the Fed will leave the cost of money unchanged to the next meeting at the end of July. In fact, it is likely that the central bank decides to wait a few more months before deciding how to proceed, so of having a clearer picture of the evolution of prices and the economy. The next FED meeting falls on 29 and 30 July, first of the deadline set by Trump to trigger heavier mutual duties against those countries that have not reached commercial agreements with the United States. A wait that for the Fed, and above all for Jerome Powell, could prove heavy to support. The president of the Central Bank is under constant attack of Trump and his administration, who consider him responsible for the failure to cut the relevant rates that the Fed is a collegial body and decide are the 12 members of the FOMC, not its president.
To put Powell on the corner and weaken it, the formal trial for his succession to lead the Fed has already been started, even if his mandate expires in May 2026. In the race for the post-Powell there are the economic adviser of Trump Kevin Hasset, the former member of the Fed Kevin Warsh and the Treasure Secretary. “I have the best job in all of Washington” but “I will do what Trump wants,” said Scott Beesent in an interview with Bloomberg, reiterating that Trump does not want to fire Powell. Yet the observers suspect that the attacks of the administration to the president of the Fed are an attempt, not too veiled, to pave the way for Powell’s dismissal.
The accusation is to waste funds and resources for the renovation of the headquarters of the Central Bank in “Versailles style”. The president of the Fed has not so far been let it touch by the attacks and, indeed, he replied on the central bank website providing all the information on the contested renovation. Even the fact that, in spite of the accusations, is not loaded with the American taxpayers but is paid by the Fed with the interests and commissions. banks.