Perceptions of political puppeteering

Daily update

The Federal Reserve meets to decide interest rates—over a hundred economists expect no change. The question is whether one can credibly disagree, without appearing as a political puppet. A case can be made for rate cuts (if one views US President Trump’s trade taxes as a heavier burden on US consumers). However, even if a Fed member sincerely believes that scenario, their dissent would almost inevitably be viewed as Trump twitching the political puppet strings in the background.
Advanced second quarter US GDP data does not add much quality information for policy-makers. The data is largely guesswork at this stage. Front-loading purchases, inventory stockpiling, long lags to trade tax impacts, and the general climate of uncertainty all distort the numbers. This figure is useful for political point scoring, but not much else.
The oft-heard strains of a US bugler sounding the retreat can be heard over the trade war battlefield, with reports that the current Sino-US trade “truce” will be extended (subject to US presidential whim). Trump has also signaled displeasure with Russian President Putin over Ukraine, pushing oil prices up but not in a way that has economic significance.
Spanish July consumer price inflation is due, balancing local economic strength with (ex-US) global disinflation forces.