Daily update
Daily update
- China’s July consumer price inflation rose a little more than expected, but this was not a signal of better demand. Excluding food prices inflation moderated, suggesting broader demand remains anemic. Food price inflation was supported by supply constraints for fresh vegetables and pork, and this sort of inflation signals potential damage to consumer spending rather than being a response to better demand.
- Former US President Trump suggested that US presidents should have more of a say over monetary policy. This is another throwback to former US President Nixon. Nixon imposed a universal 10% tariff (albeit in a very different world to today’s), and strongly influenced then Federal Reserve Chair Burns. Markets seem inclined to dismiss these retro policy proposals as not being serious. If markets were to believe Trump were serious, there may be a more significant reaction.
- While the Fed has its independence, several speakers were talking about labor markets and policy. The general sense was of modest cheerleading, and a reluctance to treat a single employment report too seriously.
- German final July consumer price inflation was unchanged (as final figures normally are). French second quarter unemployment was lower than expected, but only five economists (none from French banks) form the consensus.
