Market and non-market inflation forces

Daily update

China’s August consumer and producer price inflation was slightly higher. The suggestion is not that better demand is driving up prices, but that global inflation forces are being allowed to trickle into domestic pricing.
Brent crude oil prices are straining to break USD 100 per barrel, with escalating military action between Iran and the US, and Houthi attacks on Saudi Arabian facilities. US gasoline and diesel prices remain elevated (relevant for US politics). Parts of the West Coast could conceivably reach USD 10 per US gallon diesel if current trends continue.
US President Trump signed executive orders banning some Canadian imports. Unlike tariffs (where price increases pass quickly to consumers), bans initially lead to shortages. The inflation impact depends on other suppliers. A US firm may not want to raise prices, potentially alienating consumers, in the absence of Canadian supply. The risk is Canadian retaliation via banning or surcharging critical exports.
US Treasury Secretary Bessent embraced the gambling metaphor over attacks on the Japanese yen, declaring “I am the house”. The casino analogy only works if yen weakness were speculative. If the pre-intervention yen level were fundamentally driven, the better (if obscure) analogy is the UK’s 1992 exchange rate mechanism crisis. In that case, Bessent’s should declare “I am Lamont”.