Brazil inflation hits 5.3%, central bank set to hold rates next week
Inflation in Latin America's largest economy hit 5.30% in the 12 months through mid-July, statistics agency IBGE said, up from 5.27% a month earlier and slightly above the 5.26% expected by economists in a Reuters poll.
Brazil's central bank targets inflation at 3%, plus or minus 1.5 percentage points, and policymakers have pledged to bring it back to that level.
The bank delivered 450 basis points in interest rate hikes between September and June, taking the benchmark Selic rate to 15%, the highest since July 2006. It signaled last month a "very prolonged" pause to assess the effects of the hikes.
"The mid-month inflation figures give policymakers no reason to consider raising rates again," said Capital Economics' emerging markets economist Kimberley Sperrfechter, who expects conditions to allow for rate cuts around the turn of the year.
The central bank's rate-setting committee, known as Copom, is scheduled to meet on July 29 and 30.
In the month to mid-July alone, consumer prices as measured by the IPCA-15 index rose 0.33%, up from 0.26% in the previous month. The index had been expected to rise 0.30%, according to the median forecast in a Reuters poll.
The monthly increase was driven by higher housing costs as electricity prices climbed, IBGE said, as well as higher transport prices, with airfares jumping. Closely watched food and beverage prices, however, dropped for the second straight month.
"Today's result will not influence Copom's decision," Inter senior economist Andre Valerio said. "It should keep interest rates unchanged, reaffirm its commitment to meeting the inflation target, and offer no indication of when it might begin a rate-cutting cycle."
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Reuters
2 hours ago
- Reuters
ECB's Cipollone says euro zone inflation risks balanced, newspaper reports
FRANKFURT, July 26 (Reuters) - Risks to the euro zone inflation outlook remain balanced as the changes since June broadly offset each other, European Central Bank board member Piero Cipollone said in a newspaper interview. The ECB left interest rates unchanged on Thursday and said the outlook for inflation is more uncertain than usual, even if the economy has appeared to remain resilient. Some policymakers argued the outlook for inflation has now worsened and risks were tilted to undershooting, but Cipollone said the broader Governing Council view did not change. "We now see an additional appreciation of the euro and a slight increase in energy costs," he told Slovenian newspaper Delo in an interview published on Saturday. "The overall assessment therefore stays the same." He added that trade tensions have increased but the global economy has so far been resilient. "Overall, it seems to me that the June assessment can be confirmed and that inflation expectations are balanced," Cipollone said. The ECB has halved its key rate to 2% since June 2024 but its moderately sanguine tone on Thursday was seen as a signal it was not in any hurry to cut again. Markets now see roughly a 50% chance of more rate cuts this year, with some economists saying the easing cycle may be over.
The Guardian
2 hours ago
- The Guardian
As food prices rise, Mamdani wants public grocery stores in New York. Can it work?
When Zohran Mamdani sailed to a surprising but decisive victory in New York City's Democratic mayoral primary last month, he did so propelled by a platform laser-focused on making the country's largest city more affordable for working people. Among his proposed policies for achieving that vision – which include free childcare and a rent freeze for tenants – is the proposal to create a network of city-owned grocery stores focused on keeping food prices low rather than on making a profit. 'Without having to pay rent or property taxes, they will reduce overhead and pass on savings to shoppers,' Mamdani said on his website. 'They will buy and sell at wholesale prices, centralize warehousing and distribution, and partner with local neighborhoods on products and sourcing.' The proposal seems to be resonating. Two-thirds of New Yorkers polled said they support the creation of municipal grocery stores, according to an April 2025 report published by the Climate & Community Institute and Data for Progress. Another 85% said they were paying more for groceries this year than last, and 91% were concerned about how inflation is affecting food costs. (While inflation is one factor contributing to sticker shock at the cash register, US food companies' profits have soared as they have continued to raise prices faster than both inflation and wage increases.) 'From 2020 to 2024, the food consumer price index rose 23.6%, so we already know working-class families spend a much larger percentage of their household monthly income on food than middle- and upper-class families,' said Justin Myers, an associate professor at California State University, Fresno whose past research has investigated public grocery stores. Plus, he said, 'the average cost of groceries in New York City is 18% higher than the national average.' But could city-owned grocery stores really lower the cost of food? According to many experts, the idea isn't as out there as it might seem. While Mamdani's proposal might feel novel, there's plenty of precedent for state-supported food infrastructure. According to Anna Chworow, deputy director of the UK-based non-profit Nourish Scotland, the 20th century was full of these kinds of initiatives: wartime Britain had 'British restaurants', a chain of over 2,000 restaurants that served price-capped meals, and Poland had 'milk bars', subsidized cafeterias where meals cost two-thirds or half of what they might at a traditional restaurant. Similar establishments are starting to pop up today in India, Turkey, Indonesia, China, Mexico and Brazil, said Chworow, whose organization put out a recent report on the subject. These kinds of establishments have often been very well-received by the communities they serve. One operator of a milk bar in Warsaw told Chworow of a community that, upon hearing that their local milk bar would no longer be funded by the government, staged a protest by taking over the kitchen. 'There was a real sense of civic activism around keeping that place open,' Chworow said. Closer to home, 'public options have been part of the fabric of this nation since its founding, between the postal service, public libraries, and public parks,' said Margaret Mullins, director of public options and governance at the Vanderbilt Policy Accelerator. In fact, NYC already has six grocery stores that enjoy government support in the form of steep rent discounts, including Essex Street Market on the Lower East Side, through the city's Economic Development Corporation. 'Sometimes in places where the private market won't step in, the public can and should,' Mullins said. Across the country, many municipalities have done the same. Big cities like Madison, Wisconsin, and Atlanta, Georgia, are currently exploring ways to use city support to address food deserts, while small towns in Kansas and Florida have turned to town-owned grocery stores after privately owned grocers have shut down or left. These initiatives often begin when a community has already been failed by the private sector. Atlanta councilmember Marci Overstreet knows firsthand what it's like when a community is left completely at the mercy of private grocery stores. As councilmember of a district with limited access to fresh food, Overstreet began doing everything she could to lure grocery developers to her area, attending trade shows in Vegas and setting up meetings with big-box grocers. Time and again, she watched as store representatives would punch in her zip code and disqualify her district on the spot for not being deemed a profitable enough area to be worth opening a store in. 'Finally, we had to say, 'You know what, no one's coming. Cavalry is not coming. We're going to have to take care of this ourselves,'' Overstreet said. Overstreet spent eight years trying to solve the grocery problem in her district, which included spearheading partnerships with public schools and local churches where people could pick up food. Today, she's proud to be bringing a new, full-size grocery store to her district with the backing of Invest Atlanta, the official economic development authority of the city, in partnership with Savi Provisions, a specialty private grocer. The resulting public-private partnership isn't an exact parallel for the municipally owned stores that Mamdani has proposed for New York, but it's a reminder that when the private market left to its own devices is failing a community, government officials can find creative ways to step in. As much as New York might learn from looking to other cities, some experts say there's even better proof that government-owned grocery stores can work to be found in a surprising place: the US military. Every branch of the military has its own public grocery system, sometimes referred to as an exchange or commissary, that allows military families to buy groceries on military bases at significantly lower prices than what civilians can get from traditional grocers. 'Military families buy groceries for 30 to 40% cheaper than what grocery stores in the area sell, simply because they're not taking a full wholesale and retail markup like a lot of stores are,' said Errol Schweitzer, a grocery store veteran and former VP at Whole Foods, who has written about the commissary model before. According to Bill Moore, the former director and CEO of the Defense Commissary Agency, the commissary system saved military families approximately $1.58bn in 2023. Passing along similar benefits to civilians is quite possible, according to Schweitzer. 'It's not a radical proposal,' he said. 'There already is heavy government intervention in the food system every day.' So what would it take practically to make Mamdani's proposal work in NYC? According to Overstreet, the councilmember from Atlanta, community buy-in is key. In her district, Overstreet sought feedback about what kinds of products community members wanted access to, down to the preferred variety of apple. Overstreet and her team did this through roundtables, pop-up meetings, and both paper and online questionnaires to try to reach the widest array of people. Chworow, who researched public food infrastructure over the last century, said that creating a universally useful resource – not one that just serves targeted groups, like low-income families – is also crucial. 'As soon as you start to target the interventions, there's a level of stigma that comes around it, and people are reluctant to use them because they don't want to be associated with the stigmatized group,' Chworow said. 'Promoting it as a universal service removes those barriers, and it also oftentimes makes the economic model better.' Some of how military commissaries – and grocers like Walmart, for that matter – deliver low prices is through economies of scale, using their size and buying power as a network to negotiate lower prices with wholesalers. That could pose a problem to Mamdani's plan, as he's proposed opening just five municipal grocery stores total, one for each borough. But Schweitzer pointed out that the city already buys extraordinary amounts of food for public schools, hospitals and community colleges; by linking the grocery stores to those existing agreements, he noted, they might likewise take advantage of economies of scale that would otherwise be out of reach. Schweitzer, who has written extensively about how to make a public grocery sector work, also recommends looking to successful grocery store chains for cues. Operating like Aldi (which is to say, opening lots of smaller stores with a limited assortment) or Costco (which is to say, operating as a warehouse store; 'literally a distributor that sells to the public'), he said, could help make municipal grocery stores a success. Lastly, noted Caruso, it was worth reminding community members that such an initiative will take time to realize. Overstreet noted that it took her eight years of work to get the new grocery store in her district under way. The historical precedent, efforts in other cities, and parallels with the US commissary system of course don't prove that New York's attempts will be successful. Municipal grocery stores will have to battle many of the same problems that have sunk hundreds of private grocery stores in the city in recent years. But these examples do provide ample evidence that government-run food infrastructure can work, given the right support and proper management. 'It's not to say that anything is easy, but of course it can be done,' said Mullins. 'Just look at these other public options – the post office, public libraries, public schools. These are great things that have been critical parts of communities for a very long time.'
Daily Mail
3 hours ago
- Daily Mail
Kamala Harris' former advisor left flustered after being asked simple question about economy
A former senior adviser to Kamala Harris was left visibly flustered during a live television segment after he failed to accurately answer a basic question about the current U.S. inflation rate. During a Friday appearance on Fox News ' America Reports, anchor Sandra Smith pressed Mike Nellis, once a Senior Advisor to former Vice President Harris, on the latest economic data, asking, 'Do you know what the inflation rate is?' 'Yeah, it's like about three or four percent,' Nellis responded. But Smith quickly fired back, correcting him. 'No. It's below three. And it's been a long time since it's gotten there. I mean, you're looking at 2.5 percent inflation now.' According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) rose 2.7 percent year-over-year in June. While slightly above Smith's figure, the inflation rate has remained below 3 percent for several consecutive months, reflecting a significant cooldown from its 9.1 percent peak in June 2022 - the highest in four decades, according to the Bureau of Labor Statistics. Despite the data, Nellis insisted that inflation continues to rise. 'Inflation is still going up,' he said. 'And it's rising, according to the latest stats.' 'That's not the case,' Smith countered. 'Inflation has come down. Inflation by nature is growth in prices, but the growth has slowed.' Earlier in the segment, Nellis blamed Republicans and President Donald Trump for ongoing economic concerns. 'Right now the president of the United States is Donald Trump. Republicans are in control of Congress,' Nellis said. 'They're currently in recess rather than doing anything about inflation.' He went on to claim that beef and alcohol prices hit record highs over the July 4 weekend and criticized Trump's promises to reduce prices immediately after taking office. 'Donald Trump promised to make grocery prices go down on day one,' Nellis said. 'We're six months in and everything's more expensive.' Smith pushed back, noting that 'prices have definitely come down,' but that 'they can go down more.' Meanwhile, some economic indicators suggest relief for American consumers, according to AAA, average gas prices hit a four-year low in June. The tense exchange came just days after the Democratic Party had its own messaging blunder when its official X account posted a graphic blaming inflation from 2021 to 2024 on 'Trump's America' - even though Joe Biden and Harris were in charge the whole time. The post later deleted. The White House later shared the same graphic again, this time fixing the mistake and crediting the Biden administration. That slip-up highlights the tough spot Democrats are in as they face growing criticism over the party's handling of the economy. A new Wall Street Journal poll this week showed that 63 percent of voters view the Democratic Party unfavorably - the worst rating they've seen in 35 years. Just 33 percent said they view the party favorably, and only 8 percent said they had a 'very favorable' view, according to the poll. In contrast, Republicans, while also viewed more unfavorably than favorably, had stronger numbers - sitting at just 19 percent. President Trump's job approval stands at 46 percent, higher than the 40 percent approval rating he received at the same point in his first term, according to the WSJ. When asked which party they trusted more on major issues such as inflation, tariffs, and immigration, voters consistently favored Republicans. 'The Democratic brand is so bad that they don't have the credibility to be a critic of Trump or the Republican Party,' Democratic pollster John Anzalone, who conducted the WSJ poll with Republican pollster Tony Fabrizio, said. 'Until they reconnect with real voters and working people on who they're for and what their economic message is, they're going to have problems.' Republicans currently hold a financial edge as well, with campaign filings showing the Republican National Committee has over $80 million on hand, compared to $15 million held by the Democratic Congressional Campaign Committee, the WSJ reported.
