Stunning inflation report shows first tariff effects and sends Wall Street on a wild ride
Although it is a slight increase on the month before, when prices rose 2.3 percent, the increase of 0.1 percent suggests inflation is actually slowing as it is a smaller jump than previous months.
The latest figures brought a sigh of relief to Wall Street where analysts had forecast prices to rise closer to 3 percent.
The S&P 500 rose 0.4 percent and the Nasdaq jumped 0.6 percent in future trading on the back of the news.
The Department of Labor statistics are a surprise to some economists who have expected Trump's tariffs to have more of an inflationary effect so far.
Major retailers such as Walmart have said they are raising prices to offset the cost of tariffs.
However, the latest report shows that other major consumer prices are down, including smartphones which fell 1.6 percent and airline fares down 2.7 percent.
Traders now believe there is a 75 percent chance the Federal Reserve will cut interest rates by September, compared to 60 percent yesterday, Bloomberg reported.
'Ultimately, if tariff rates are up, and core goods prices aren't up by as much as the consensus thought it implies more margin squeeze at retailers and less price pass through,' Neil Dutta from Renaissance Macro told Bloomberg.
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The Independent
27 minutes ago
- The Independent
Right now, Trump can do no wrong – except in Washington DC
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From there, it is clear that Trump has been testing the limits of presidential power, but also that, more often than not, he has been coming out on top. Add the up-ending of the international trading order with an ever-changing set of tariffs, and some measures that seem very alien to many Europeans – such as seizing and summarily deporting undocumented migrants, with back-up from the National Guard and the Marines – and the impression might well be of disorder, inconsistency, maladministration and failure. That is not, for the most part, however, how it looks from the Trump side of the Atlantic, where I have just bucked the international tourism trend by venturing on holiday. And it would probably be wise for Europeans to accept the truth: Trump has been testing the limits of presidential power and, more often than not, coming out on top. Exactly a year ago, before he had even been re-elected president, a Supreme Court judgment upheld immunity from prosecution for past presidents. 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Reuters
36 minutes ago
- Reuters
European shares edge lower as US tariff deadline looms
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The Guardian
an hour ago
- The Guardian
Trump says US will send letters setting tariff rates to trading partners
Donald Trump has said that the US will start sending out letters to trading partners on Friday setting tariff rates that countries will have to pay from the beginning of next month. The US president told the media that about '10 or 12' letters would be sent out initially, with further letters sent out over the 'next few days'. His administration is expected to write to all of its trading partners without a deal in place before 9 July, the end of a 90-day pause on Trump's 'reciprocal tariffs'. 'I think by the ninth they will be fully covered,' he said, referring to the deadline the US set for countries to reach bilateral trade deals to avoid higher duties. 'They will range in value from maybe 60% or 70% tariffs to 10% and 20% tariffs.' Trump did not provide further details on which countries would get the tariffs, or whether they would be targeted at certain goods and services. The Trump administration has so far announced deals with the UK and Vietnam, and agreed a truce with China after tariffs imposed on the world's second largest economy sparked a trade war. On Thursday, Scott Bessent, the US treasury secretary, hinted that the US was close to a high-level 'framework' deal with the EU that would avert 50% tariffs on all exports from the bloc next Wednesday. Trump initially revealed his programme of global tariffs on 2 April, 'liberation day', but later announced the 90-day pause to allow countries time to negotiate. Trump put more pressure on those countries still negotiating, saying that while a 'couple' more trade deals were close to completion his 'inclination is to send a letter out and say what tariffs they are going to be paying'. He said: 'It's much easier.' Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Earlier this week Trump said he would not extend the 9 July deadline for deals to be struck. 'We're going to do what the president wants,' Bessent said in an interview on Thursday. 'And he'll be the one to determine whether they're negotiating in good faith.' On Thursday, Trump secured passage of his controversial flagship tax and spending bill, after the House of Representatives approved it.
