Inflation

Debt markets globally were roiled this week as the yield on the 30-year Treasury rose to almost 5% before easing in the past two sessions.

Yields on two- to five-year notes rose at least two basis points to session highs after the U.S. economy's second-quarter growth rate was revised to 3.3% from 3%, exceeding economist expectations.

In minutes from the Fed's July meeting, officials highlighted the risks of inflation outweighing concerns over the labor market, which investors overlooked.

U.S. consumers probably experienced a slight pickup in underlying inflation in July as retailers gradually raised prices on a variety of items subject to higher import duties.

Officials are balancing food and retail payroll tax and wage inflation risks against mounting jobs losses and a "subdued" economy that could dampen future price pressures.

Two policymakers have suggested they might support a cut at the July meeting, but most others have signaled they want more time to assess the impact of tariffs on inflation.

The recent rally was driven by economic data that reinforced wagers on at least two rate cuts this year, as well as speculation President Donald Trump will name a more dovish successor to Jerome Powell.

The Federal Reserve's preferred measure of inflation moved further from its 2% target, underscoring the central bank's reluctance to cut rates.

Markets are currently wagering the US central bank will cut interest-rates once more with around a 70% chance of a second move this year.

Price growth continued to trend toward the Federal Reserve's 2% target, but not enough to spur action from the central bank.

Federal Reserve Gov. Michael Barr said global supply chain disruptions and inflation caused by tariffs could weigh heaviest on small businesses, especially those with little access to credit.

The slowdown reflected a decline in energy costs, used vehicles, and airfares. Motor vehicle insurance — a main source of inflation in recent years — also retreated.

The growing fears about the outlook for the global economy extended far beyond stocks. Oil tumbled on speculation demand will slow.

The central bank wants to let Trump's policies play out across the economy before deciding which way to move interest rates, and it's too soon to know what the impacts will be, the Federal Reserve chair said.

Notably in February, Americans reduced spending on services for the first time in three years in the face of higher prices — including on dining out.

The looming initial public offering from Swedish payments firm Klarna comes in the foreground of tariff uncertainties and inflationary pressures.

Fresh tariffs from the Trump administration, paired with retaliatory action from US trade partners, have fanned Americans' expectations for future inflation.

Summers said a combination of major immigration restrictions, federal government layoffs and damage to US competitiveness from President Donald Trump's tariffs.

The U.S. currency has surged sharply against its major peers since Trump's election on speculation that his tax-cut and tariff plans would fan inflation pressures.

Strong economic growth coupled with a solid labor market allows officials to wait for further evidence of cooling inflation before adjusting rates again. It also offers them time to evaluate President Donald Trump's policies.