Inflation, disinflation, and deflation

Daily update

The UK actually managed to publish some data without delay or suspension. July inflation rates were slightly higher than expected, although disinflation forces are also evident. A 30.2% monthly increase in airfares did much to push the figures higher. This is almost certainly a seasonal adjustment distortion related to school holidays.
US Treasury Secretary Bessent is reportedly getting excited that stablecoins might increase demand for short-dated US Treasuries, helping finance the unsustainable US fiscal position. However, stablecoins are more about redistributing money supply. Someone selling Treasury bills to buy stablecoins, which invest the money in Treasury bills does not change demand for US debt instruments.
Japan’s export data showed weakness on falling prices, led by the auto sector. Japanese car exporters have (almost uniquely) offered discounts to US importers burdened by new trade taxes. This pattern is not repeated elsewhere, but does lower the nominal value of exports (it is not a negative for real, price adjusted GDP).
The minutes of the last Federal Reserve meeting are due—a meeting with two governors choosing to dissent. The minutes are not likely to conclusively show whether that dissent was an attempt to attract US President Trump’s attention, or a genuine concern about how bad the US economic outlook is.