FOX Business Briefs 8/1
How did your country report this? Share your view in the comments.
Diverging Reports Breakdown
Inflation accelerated in June as the Fed weighs the impact of tariffs in rate cut timing
Consumer price index (CPI) rose 0.3% in June compared with last month, while it was up 2.7% on an annual basis. So-called core prices, which exclude more volatile measurements of gasoline and food, were up 0.2% from the prior month and 2.9% from a year ago. The June CPI report comes as the Federal Reserve is weighing the timing of interest rate cuts against signs of tariffs contributing to higher consumer prices. Price hikes are particularly difficult for lower-income Americans, because they tend to spend more of their already-stretched paychecks on necessities and have less flexibility to save money. The Fed will want to hold steady as it considers whether to cut interest rates earlier this year if not for uncertainty created by the Trump administration’s tariff policies, Chair Jerome Powell said. The first signs of tariff impact on the whole show the underlying inflation remained muted, a Goldman Sachs strategist said. “While the acceleration in tariff-exposed services inflation continues to moderate, the first of greater price pressures to come is likely to come in June,” she said.
The Bureau of Labor Statistics on Tuesday said that the consumer price index (CPI) – a broad measure of how much everyday goods like gasoline, groceries and rent cost – rose 0.3% in June compared with last month, while it was up 2.7% on an annual basis. Those figures were slightly higher than the estimate of economists polled by LSEG.
Both marked accelerations from last month, when the monthly increase was 0.1% and the annual figure was 2.4%.
So-called core prices, which exclude more volatile measurements of gasoline and food to better assess price growth trends, were up 0.2% from the prior month and 2.9% from a year ago. Those figures were slightly cooler than economists’ expectations. As with the headline number, the core numbers ticked higher compared with May, when inflation rose 0.1% on a monthly basis and 2.8% on an annual basis.
FED OFFICIAL REVEALS WHY AMERICA’S ECONOMY REMAINS ‘REALLY HEALTHY’ DESPITE HOLDING OFF ON RATE CUTS
High inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. Price hikes are particularly difficult for lower-income Americans, because they tend to spend more of their already-stretched paychecks on necessities and have less flexibility to save money.
Food prices rose 0.3% in June from the prior month and were 3% higher on an annual basis. The food at home index rose 0.3% in June from a month ago and is up 2.4% on an annual basis, while the food away from home index increased 0.4% on a monthly basis and is 3.8% higher than a year ago.
Egg prices declined 7.4% in June, continuing a cooling trend after the industry saw rapid price growth last year due to an avian flu outbreak, which left prices still 27.3% higher than a year ago. The index for meats, poultry and fish rose 0.8% on a monthly basis and is up 4.1% from last year. The dairy index declined 0.3% from a month ago and is up 0.9% compared with a year ago, while the fruits and vegetable index was up 0.9% in June and is 0.7% higher than last year.
ATLANTA FED’S BOSTIC WARNS TARIFF IMPACTS COULD CAUSE PROLONGED INFLATION
Energy prices increased 0.9% in June after falling by 1% in May, driven by 1% increases in the gasoline and energy indexes last month, as well as a 0.5% increase in the natural gas index. The energy index fell 0.8% over the last year while the gasoline index is down 8.3% from a year ago, although the electricity index is up 5.8% and natural gas has risen 14.2% in the last year.
Housing prices rose by 0.2% in June and was the primary factor in driving the overall CPI increase. Over the last year, the shelter index increased 3.8%.
Transportation costs rose 0.2% on a monthly basis and are 3.4% higher than a year ago. Airline fares declined 0.1% for the month and are down 3.5% compared with a year ago, while motor vehicle insurance rose 0.1% on a monthly basis and is 6.1% higher than last year.
The June CPI report comes as the Federal Reserve is weighing the timing of interest rate cuts against signs of tariffs contributing to higher consumer prices.
Fed Chair Jerome Powell recently indicated that the central bank would likely have cut interest rates earlier this year if not for uncertainty created by the Trump administration’s tariff policies, adding that central bank policymakers will continue to monitor economic data as they consider monetary policy shifts.
TRUMP CALLS FED CHAIR POWELL A ‘KNUCKLEHEAD,’ SAYS INTEREST RATES SHOULD BE BELOW 1%
“Inflation has begun to show the first signs of tariff pass-through,” said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. “While services inflation continues to moderate, the acceleration in tariff-exposed goods in June is likely the first of greater price pressures to come. The Fed will want to hold steady as it awaits more data.”
“While today’s CPI release showed some early signs of tariff impact, on the whole underlying inflation remained muted,” said Kay Haigh, global co-head of fixed income and liquidity solutions in Goldman Sachs Asset Management. “Price pressures, however, are expected to strengthen over the summer and the July and August CPI reports will be important hurdles to clear. For the time being the Fed remains in wait and see mode. Should underlying inflation, however, continue to prove benign the path remains open to a resumption of the Fed’s easing cycle in the autumn.”
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The June CPI inflation report solidified the market’s view that the Fed won’t cut interest rates this month. The probability of the benchmark federal funds rate remaining at the current range of 4.25% to 4.5% rose from 93.8% yesterday to 97.4% today, according to the CME FedWatch tool. Similarly, the probability of rates being held steady after the Fed’s September meeting also ticked higher from 37.4% yesterday to 42.2% following today’s report.
‘Trump accounts’ for newborns could grow to $1.9M, Treasury says
New Treasury projections show that the “Trump accounts” offered to American children could grow into a seven-figure nest egg by adulthood. If the maximum contribution is made each year on the child’s birthday through age 17, the account could grow to between $191,500 and $676,400. Even at the lower end of projected returns, the savings account could still yield nearly $600,000 over the same period.
The new savings program, tucked into the One Big Beautiful Bill Act and signed into law by President Donald Trump on July 4, offers children an initial one-time $1,000 government investment at birth.
HOW THE ‘BIG, BEAUTIFUL BILL’ GIVES AMERICAN BABIES A FINANCIAL HEAD START
Parents and relatives can contribute up to $5,000 annually to a child’s account until the child turns 18, with the cap potentially adjusted for inflation after 2027. If the maximum contribution is made each year on the child’s birthday through age 17, the account could grow to between $191,500 and $676,400, depending on investment performance.
The financial head start for newborns could grow to as much as $1.9 million by the age of 28 if fully funded and left untouched, according to the Treasury Office of Tax Analysis. Even at the lower end of projected returns, the savings account could still yield nearly $600,000 over the same period.
Even without additional contributions beyond the federal government’s initial $1,000 deposit, the Treasury estimates the account could grow to between $3,000 and $13,800 over 18 years.
Families can open an account and receive a $1,000 government investment for each child born between Jan. 1, 2025 and Dec. 31, 2028.
A Social Security number is required to open the account and funds cannot be withdrawn until the child reaches the age of 18.
Kevin Hassett: Trump’s 50% tariff on copper imports aims to prepare for US for future ‘time of war’
White House Economic Council Director Kevin Hassett defended President Donald Trump’s decision to impose a 50% tariff on copper imports. Hassett: “The bottom line is that if there is a time of war, then we need to have the metals that we need” Copper prices on U.S. platform COMEX to a record $5.6820 a pound, a premium of more than $2,920 a ton over the price on the London Metal Exchange.
In an interview on ABC’s “This Week,” Director Kevin Hassett pointed to the importance of the U.S. being self-sufficient when it comes to key resources.
“The bottom line is that if there is a time of war, then we need to have the metals that we need to produce American weapons,” Hassett said on the show on Sunday.
“And copper is a key component in many American weapon sets. And so as we look forward to the threats that America faces, the president decided that we have plenty of copper in the US, but not enough copper production. And that’s why he’s taken a strong step,” he said.
TRUMP PLEDGES 50% TARIFF ON COPPER IMPORTS
Trump made the announcement last week, during a Cabinet meeting in front of the press. He linked the move to his America First policy of rebuilding industrial supply chains and forcing companies to source materials domestically.
“Today we’re doing copper,” Trump said while noting that imported steel and aluminum already face 50% tariffs, while cars and car parts have 25% tariffs.
US MINERS EYE COPPER COMEBACK AS DEMAND RISES
The duties on their own may be manageable, but prices of the metal vital for making cars, in particular in wire harnesses and in motors for electric vehicles, have soared to record highs, according to Reuters.
Trump did not specify whether the tariff applies to all countries or selected ones. Chile is the largest copper exporter globally. The U.S. has a free trade agreement with Chile, but a blanket tariff could override it unless exceptions are carved out.
CLICK HERE TO READ MORE ON FOX BUSINESS
Trump’s announcement of the tariff propelled prices on U.S. platform COMEX to a record $5.6820 a pound or $12,526 a metric ton, a premium of more than $2,920 a ton over the price on the London Metal Exchange, currently around $9,600 a ton, which the market uses as the global benchmark. The rate is effective August 1.
FOX Business’ Michael Dorgan and Reuters contributed to this report.
Trump slams Powell as ‘moron’ and calls for Fed’s board to take control of policy moves
President Donald Trump on Friday upped his attacks on Federal Reserve Chair Jerome Powell. He called for the central bank’s policymakers to “assume control” of the Fed’s policy decisions. Trump has repeatedly criticized Powell’s leadership at the Fed, including recent calls for the Fed to cut interest rates to boost the economy. The Federal Reserve determines its interest rate policy collectively through a 12-member panel known as the Federal Open Market Committee (FOMC), which votes on those decisions with each member – including Powell – receiving one vote. The FOMC isn’t scheduled to meet again until Sept. 17-18, which would leave an unusual emergency meeting as the only avenue by which policymakers could cut rates ahead of time. The July jobs report came in weaker-than-expected with large downward revisions to what had been solid job gains in the past two months.
Trump has repeatedly criticized Chairman Powell’s leadership at the central bank despite having appointed him as the Fed chair in 2017, including recent calls for the Fed to cut interest rates to boost the economy.
He took to his Truth Social platform early Friday morning to urge the Federal Reserve’s Board of Governors to take control from Powell if he resists immediate interest rate cuts, writing:
“Jerome ‘Too Late’ Powell, a stubborn MORON, must substantially lower interest rates, NOW. IF HE CONTINUES TO REFUSE, THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!”
TRUMP HITS POWELL AS ‘TOTAL LOSER’ AFTER FED LEAVES RATES UNCHANGED
The Federal Reserve determines its interest rate policy collectively through a 12-member panel known as the Federal Open Market Committee (FOMC), which votes on those decisions with each member – including Powell – receiving one vote.
The FOMC isn’t scheduled to meet again until Sept. 17-18, which would leave an unusual emergency meeting as the only avenue by which policymakers could cut rates ahead of time.
Emergency meetings by the FOMC to cut interest rates are rare and last occurred in March 2020 at the outset of the COVID pandemic.
FEDERAL RESERVE HOLDS KEY INTEREST RATE STEADY FOR FIFTH STRAIGHT MEETING DESPITE TRUMP’S PRESSURE
Trump’s post early Friday morning came on the heels of the FOMC holding interest rates steady for the fifth straight meeting on Wednesday.
Powell cited elevated levels of economic uncertainty related to labor market conditions as well as the impact of tariffs on inflation and consumer prices as the reason for the pause. He added that the economy was in a solid position and the central bank is well positioned to respond to signs of economic deterioration.
FED’S FAVORED INFLATION GAUGE SHOWS CONSUMER PRICES ROSE AGAIN IN JUNE
Thursday saw the release of the Commerce Department’s personal consumption expenditures (PCE) index – the Fed’s favored inflation gauge – which showed headline PCE inflation rose on an annual basis from 2.3% in May to 2.6% in June, well above the Fed’s 2% longer-run inflation target.
The inflation dampened the market’s outlook for rate cuts at the Fed’s next meeting in September, though that reversed on Friday when the July jobs report came in weaker-than-expected with large downward revisions to what had been solid job gains in the past two months.
US JOB GROWTH COOLED IN JULY AMID ECONOMIC UNCERTAINTY
The Labor Department’s July jobs report showed the economy added 74,000 jobs last month, well below the 110,000 estimate of economists polled by LSEG.
Furthermore, the report revised the job gains of 144,000 in May and 147,000 in June down to 19,000 and 14,000 respectively. Taken together, those revisions leave employment in those months 258,000 jobs lower than previously reported in what the Bureau of Labor Statistics noted was a “larger than normal” revision.
The unexpectedly weak jobs report prompted the market to reevaluate the odds of a September rate cut, which had declined to just 37.7% on Thursday, according to the CME FedWatch tool, in the wake of the rising inflation data and the FOMC’s decision the prior day.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The probability of a 25-basis-point cut jumped to 78.8% following the soft labor market data as of the tool’s reading in the late morning hours on Friday.
A look at the unfolding battle between Trump and Powell over Fed policy
The relationship between President Donald Trump and Federal Reserve Chairman Jerome Powell is rapidly deteriorating. At the heart of the conflict is Powell’s reluctance to lower interest rates. In recent weeks, the president has intensified his pressure campaign, publicly chastising Powell and using personal insults to express his frustration with the Fed’s decisions. Trump called Powell by the nickname “Mr. Too Late” and said that by not cutting rates, the chair has cost the U.S. “hundreds of billions of dollars” The president called Powell “truly one of the dumbest, and most destructive, people in government” He added that his current Fed chair is an “American disgrace” Trump said he was considering changing his mind about firing Powell, who he called a “total and complete moron” Trump called on Powell to resign immediately and “We should get somebody in there that’s going toLower interest rates” and “get rid of this knucklehead guy,” citing his frustrations over Powell’s refusal to cut rates.
At the heart of the conflict is Powell’s reluctance to lower interest rates, a stance rooted in the Fed’s cautious, data-dependent approach to managing inflation and economic growth.
Trump, who appointed Powell as Fed chair in 2017, has grown increasingly vocal in his criticism, repeatedly urging the central bank to cut rates as a way to stimulate the economy.
In recent weeks, the president has intensified his pressure campaign, publicly chastising Powell and using personal insults to express his frustration with the Fed’s decisions.
POWELL SHARES WHAT IT WOULD TAKE FOR HIM TO LEAVE THE FED, BOOK REVEALS
Timeline:
Jan. 29: The Fed holds rates steady amid inflation uncertainty. Trump says in a social media post that if the “Fed had spent less time on DEI, gender ideology, green energy, and fake climate change” the nation’s inflation rates would not have been an economic issue.
TRUMP URGES RATE CUTS TO BOOST SAVINGS, BUT FED SAYS ECONOMY IS STRONG
Powell pushed back on former Department of Government Efficiency (DOGE) chief Elon Musk’s claims that the Fed is “absurdly overstaffed.”
“We run a very careful budget process where we’re fully aware. We owe that to the public, and we believe we do that. I’ve got no further comment on that, thanks,” Powell told FOX Business during a press briefing. Powell also announced that the central bank would hold interest rates steady.
Feb 12: Trump says lower interest rates will go “hand-in-hand” with his administration’s tariff rollout. “Let’s rock and roll, America,” Trump wrote in a Truth Social post.
March 19: Powell announces the Fed will continue holding interest rates steady.
April 4: Trump turns up the heat on Powell in a Truth Social post in all caps, writing, “CUT INTEREST RATES JEROME AND STOP PLAYING POLITICS.”
April 17: Trump says in a social media post that Powell’s “termination cannot come fast enough,” adding the Fed chief he tapped in 2017 is “always too late and wrong.”
April 21: The president demands “major loser” Powell immediately cut rates.
May 7: Powell says the Fed will leave its benchmark interest rate unchanged.
May 8: Trump calls Powell a “fool” who “doesn’t have a clue” the morning after the Fed left rates at the 4.25% to 4.5% range. He later says Powell did not cut rates because he was “not in love with me.”
TRUMP’S POTENTIAL SHORTLIST FOR THE FED CHAIR IS TAKING SHAPE
May 29: Powell meets with Trump at the White House for the first time since the start of the president’s second term.
June 19: The president calls Powell “truly one of the dumbest, and most destructive, people in government” in a Truth Social post. He added that his current Fed chair is an “American disgrace.”
June 21: Trump says he was considering changing his mind about firing Powell, who he called a “total and complete moron.” “Maybe, just maybe, I’ll have to change my mind about firing him?” Trump said in a Truth Social post.
June 24: In a social media post, Trump says he hopes lawmakers work “this very dumb, hardheaded person, over.” The Truth Social post came ahead of Powell’s appearance before the House Financial Services Committee.
June 25: During a NATO press briefing, Trump said Powell had a “low IQ” and that he was considering three or four candidates to take the Fed chair job.
June 30: White House press secretary Karoline Leavitt reads out from Trump to Powell during a press briefing. Trump called Powell by the nickname “Mr. Too Late” and said that by not cutting rates, the Fed chair has cost the U.S. “hundreds of billions of dollars.”
HOPEFULS EYEING POWELL’S JOB INTENSIFY PUSH AMID TRUMP RIFT
July 8: Trump calls on “terrible” Powell to resign immediately and tells reporters, “We should get somebody in there that’s going to lower interest rates.”
July 14: Trump describes Powell as a “knucklehead” and a “stupid guy,” citing frustrations over Powell’s refusal to cut rates. “We should be at 1%. We should be less than 1%,” the president said of the rates.
July 15: Trump calls renovation cost overruns at the Federal Reserve a “fireable offense” and says talking to Powell is “like talking to a chair.”
Treasury Secretary Scott Bessent said the White House has begun a “formal process” to find Powell’s successor. Bessent declined to give a timeline for the nomination.
July 16: Trump asks House Republicans during a meeting if he should fire Powell. The president tells reporters at the White House “almost every one of them said I should” dismiss the Fed chair. He said it was unlikely he will fire Powell.
Trump also told reporters at the White House that Powell was doing a “lousy” job and that several people have called him begging for the role.
TRUMP INSISTS ‘NO TENSION’ WITH POWELL DESPITE AWKWARD CLASH ON CAMERA OVER RENOVATION COST
July 18: In a social media post, Trump calls Powell a “numskull” and says the seven people that make up the Federal Reserve Board of Governors are “equally to blame” for hurting the U.S. economy.
July 24: Trump tours the Federal Reserve’s construction site with Powell and tells reporters that the renovations will cost $3.1 billion, a hike from the previous $2.5 billion estimate.
Powell dismisses the claim before explaining that Trump’s estimate includes work outside the scope of the current renovation.
July 25: The president told reporters before departing for Scotland that he thought Powell was a “very good man” and that the two had a productive meeting.
He reiterated that Powell should cut rates at next week’s Federal Open Market Committee meeting.
July 28: Trump said that the U.S. economy is “doing so well even without the rate cut” during a bilateral meeting with U.K. Prime Minister Keir Starmer in Scotland.
“He should cut. A smart person would cut,” Trump said, adding that Powell “leaves very soon.”
“I’ll miss him greatly,” Trump added.
A RARE, BEHIND-THE-SCENES LOOK AT THE FED’S $2.5B RENOVATION THAT’S RANKLED TRUMP
July 30: Powell said during a press conference that the Federal Open Market Committee decided to leave the rate unchanged.
Powell said that while the labor market was “solid,” he said inflation was “somewhat above” the Fed’s 2% target. The decision marks the fifth time this year the Fed has kept the interest rate steady.
Before the FOMC meeting, Trump said that Powell has “done a bad job” and is “always too late.”
July 31: In a Truth Social post, Trump called Powell “too late, “too angry” and “too political” to have the job as Fed chair.
The president, who appointed Powell to the role in 2017, also called the ongoing renovation of the Fed’s headquarters as “corrupt.”
Source: https://www.foxbusiness.com/video/6376450004112