Inflation Nation: Why The U.S. Economy Can’t Dodge Tariff Fallout

Economic

Summary:

Trump’s latest wave of tariffs is hitting the U.S. economy harder than many expected. Prices are rising across key categories like appliances, electronics, produce, and clothing — and inflation is starting to reflect it. While the stock market still looks strong, cracks are forming beneath the surface. This article breaks down how tariffs are fueling inflation, rattling consumer wallets, and putting real pressure on the broader economy.

Tariffs Are Shaking the Economy, Not Stabilizing It

The U.S. economy is entering a turbulent chapter. Trump’s latest wave of tariffs is more than just a political headline — it’s starting to show up in real prices. Goods from Canada, China, Mexico, and the EU are now facing duties as high as 50%. That means everyday items, from phones to coffee, are suddenly more expensive.

These tariffs are a tax on imports. While the administration says foreign exporters will carry the burden, U.S. businesses pay upfront — and guess what? They pass the cost on to consumers. For months, companies avoided price hikes by hoarding inventory. But now, that buffer is drying up. Sticker shock is next.

How the Economy Is Feeling the Heat

The economy isn’t collapsing, but it’s definitely sweating. In June, inflation hit 2.7% — the highest in four months. That’s no coincidence. Prices are moving up on items with heavy tariff exposure. Appliances rose nearly 2% last month. Toys, tools, and tech? Also climbing.

Gas and food are bouncing too. Tariff-related costs are mixing with global supply disruptions and climate issues — creating a perfect storm. Some goods, like copper-powered electronics or imported coffee, are now double-punched by material costs and taxes. Economists warn: this is just the beginning. Businesses have held the line on prices as long as they could. But now, the line is breaking.

Inflation Pressures Are Spooking Markets

Stocks are still climbing — for now. But inflation jitters are starting to creep in. Wall Street knows that price hikes cut into profits and demand. When appliances, tech, or produce get more expensive, consumers pull back. That hurts corporate earnings, especially for retailers and manufacturers.

Investors have seen CPI ticking up. That makes the Fed’s next move harder. Rate cuts might still come later this year, but rising inflation puts pressure on policymakers to wait. The result? Uncertainty. And markets hate that. While the S&P and Nasdaq hit new records, some analysts think we’re in the eye of the storm. When August 1 hits, and new tariffs kick in, stocks could wobble.

Prices Climb, but Consumers Can’t Look Away

For consumers, the effects are already visible. Cheap clothing is no longer cheap. Basic apparel now carries tariffs up to 48%. Washing machines? Their prices surged. And while you don’t buy a washing machine every week, you do buy fruit, vegetables, and coffee. Produce from Mexico and Brazil could get way more expensive, and that’s bad news for family budgets.

Electronics also got pricier. Copper tariffs affect everything from TVs to iPhones. Even domestically made devices are costlier, since imported components are still taxed. And let’s not forget alcohol. Beer and wine from the EU and Mexico are under threat. Meanwhile, retaliatory tariffs from Europe could raise prices on U.S. spirits. Consumers are caught in the middle of a global trade war they never asked for.

The Economy Is Resilient, but for How Long?

Yes, the economy still shows strength. Retail sales surprised to the upside. Jobless claims are low. Earnings season started strong. But none of that means we’re safe from what’s coming. Economic data always lags reality. What we’re seeing now is the result of past stability — not future conditions.

As inventories run dry and new tariffs stack up, the cost pressures will only grow. And while inflation has been tame so far, the cracks are forming. If tariffs expand, and if retaliations spread, both prices and uncertainty will rise. The U.S. economy may be strong, but it’s not invincible. It’s time to pay attention — because the impact of these tariffs is no longer just political noise. It’s economic reality.

Source: CryptoSlate

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Devin

Cryptocurrency

Bank of America Enters Stablecoin Market Officially

Bank of America, led by CEO Brian Moynihan, officially announced its entrance into the stablecoin arena during a July 16, 2025 earnings call in New York.

The action reflects the evolving landscape of traditional banking engaging with digital currencies, emphasizing Bank of America's intention to integrate stablecoins once market infrastructure and demand mature.

Bank of America is spearheading its official entry into the stablecoin market. CEO Brian Moynihan indicated significant progress in developing dollar-pegged tokens, without a definite launch timeline. The bank plans to collaborate with established industry players for effective implementation.

Leading the initiative, Brian Moynihan highlighted the need for banks to adapt to crypto's impact on payment systems. "We’ve done a lot of work. We’re still trying to figure out how big or small it is because of some of the places are not big amounts of money movement. So you’d expect us all to move," he stated. Drawing from past experiences like Zelle, BoA aims to respond proactively. Several major U.S. banks explore stablecoin possibilities, setting a collaborative tone for the industry.

The stablecoin push could transform client money flows, according to Moynihan's statements. While no immediate impact on ETH, BTC, or traditional cryptocurrencies is visible, trillions in client payments might leverage these digital tokens upon launch.

The potential stablecoin use reflects the banking industry's strategy to combat fintech disruption. Historically, banks have developed consortium models to contend with emerging challengers. The anticipation of the GENIUS Act plays a pivotal role in shaping timing and participation strategies.

A focus on regulatory frameworks and market demand will dictate Bank of America's pace. The stablecoin initiative might coexist alongside private blockchains, incorporating elements from the Zelle consortium, highlighting a distinct tendency toward controlled digital asset ecosystems.

Source: CryptoSlate

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Thomas

Economic

Global shares were on track for weekly gains on Friday as robust U.S. economic data and corporate earnings this week tempered tariff concerns for now, while the yen headed toward a second successive weekly loss ahead of a crunch legislative election in Japan on Sunday.

Stronger than expected U.S. retail sales and jobless claims data, suggesting modest improvement in economic activity, helped to push the S&P 500 and the Nasdaq to close at record highs on Thursday.

MSCI's broadest index for global stocks edged up 0.2% on Friday and was on track for a 0.6% weekly gain.EURONEXT:IACWIAsian shares outside Japan were up 0.9% on the day (.MIAPJ0000PUS), while European stocks were broadly flat. Wall Street futures,were also flat ahead of the open.

A solid start to earnings season in the U.S. - with companies including streaming giant Netflixbeating forecasts - is supporting investor confidence, said Eren Osman, managing director of wealth management at Arbuthnot Latham.

"We're pretty constructive on the (U.S.) macro backdrop... We do see some scope for slowing growth, but not for anything material and that's giving the markets quite a nice bounce," Osman said, adding the potential full impact of U.S. tariffs was still in focus.

Alphabetand Teslaare among the companies reporting half-year results next week, which will further test the market mood.

Oil prices also gained on Friday as investors weighed new European Union sanctions against Russia, which include measures aimed at dealing further blows to Russia's oil and energy industries.

U.S. cruderose 1% to $68.19 per barrel and Brentwas up 0.8% to $70.06 a barrel.

The yen wasbroadly flat at 148.5 per dollar but was about 0.7% weaker this week after polls showed Japanese Prime Minister Shigeru Ishiba's coalition was in danger of losing its majority in the upper house election on Sunday.

Data on Friday showed Japan's core inflation slowed in June due to temporary cuts in utility bills but stayed above the central bank's 2% target. The rising cost of living, including the soaring price of rice, is among the reasons for Ishiba's declining popularity.

"If PM Ishiba decides to resign on an election loss, USDJPY could easily break above 149.7 as it would usher in an initial period of political turbulence," said Jayati Bharadwaj, head of FX strategy at TD Securities.

"JPY could reverse the recent dramatic weakness if the ruling coalition wins and is able to make swift progress on a trade deal with Trump."

Elsewhere, the U.S. dollar indexslipped 0.2% to 98.285, but was still heading for a second successive weekly gain of about 0.4%, bouncing from a 3-1/2 year low hit over two weeks ago.

Fed Governor Christopher Waller said on Thursday he continues to believe the central bank should cut interest rates at the end of this month, though most officials who have spoken publicly have signalled no desire to move.

U.S. Treasury yields were slightly lower. Benchmark 10-year yieldsdropped nearly 3 basis points to 4.44%, while two-year yields (US2YT=RR) also edged 3 bps lower to 3.89%.

Spot gold pricesgained 0.4% to $3,353 an ounce.

Source: TradingView

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Damon

Economic

Welcome to our guide to the commodities markets powering the global economy. Today, energy reporter Stephen Stapczynski looks at the state of gas demand in Asia.

A heat wave sweeping across Northeast Asia prompted a jump in natural gas prices, redirecting volumes away from Europe at a time when the region should be restocking for winter.

To the relief of buyers everywhere, that may now be ebbing. That’s partly the prospect of cooler weather — but it’s also a sign that after three years of summer turbulence, the gas market is returning to normality.

Japan and South Korea’s sweltering temperatures this month left liquefied natural gas buyers clambering to secure shipments and racing to top up drained inventories. At least one cargo originally bound for Europe was rerouted.

China’s imports also climbed steadily, with its 30-day moving average back in line with the seasonal norm after a dip.

Now temperatures look set to ease, and that’s helping cool any outstanding gas anxiety. Prices in Asia rose 5% in the week through Monday before giving up much of that gain by Friday.

The real sign of normality is that they’re unlikely to swing much higher at this stage, according to traders, even if mercury rises sharply once again.

The explanations are mostly clear. Chinese buyers are relying on long-term contracts, for example, not the spot market. South and Southeast Asia have largely avoided the crippling heat of previous years during their summer peaks.

Competition between Asia and Europe for LNG also appears to have relaxed this year, thanks in part to the European Union’s adoption of more flexible winter-storage targets. All the while, North American exporters have been bringing more LNG supply online.

And there are reasons to expect further cooling. China’s coal output remains consistently strong, for one. As long as coal remains cheap, or at least cheaper than gas, utilities will continue to prioritize it, at least in the short term.

It’s a notable shift for a market that’s lived on edge ever since Russian gas flows to Europe began dwindling earlier this decade, even before pipelines were all but cut off in 2022.

Barring another geopolitical crisis in the Middle East, the summer energy market may finally be catching a break.

US solar manufacturers said they filed new trade petitions against India, Indonesia and Laos alleging illegal practices by largely Chinese-owned companies operating in those countries. The anti-dumping and countervailing duty claims were submitted by the Alliance for American Solar Manufacturing and Trade, which includes First Solar Inc., Mission Solar Energy and Qcells.

European Union states approved a fresh sanctions package on Russia because of its war against Ukraine that includes a revised oil price cap, new banking restrictions, and curbs on fuels made from Russian petroleum.

Saudi Aramco is in advanced talks to sell a roughly $10 billion stake in midstream infrastructure serving the Jafurah natural-gas project to a group led by BlackRock Inc., according to people with knowledge of the matter.

BP Plc agreed to sell its US onshore wind business to LS Power as the company continues efforts to pivot back toward its core oil and gas business and reverse years of share underperformance. The value wasn’t disclosed.

The Big Take goes to a border town between China and Myanmar where a rebel army called the Kachin Independence Organization is building a rare-earth empire that allegedly supplies major global manufacturers.

Talen Energy Corp. is buying two gas-fired plants for $3.8 billion to help meet surging electric demand from data centers. The Pennsylvania and Ohio facilities have a combined capacity of about 3 gigawatts.

US gasoline demand has pulled back sharply from the yearly high reached two weeks ago, suggesting that the summer driving season may be winding down, according to BloombergNEF. The four-week average of product supplied — a proxy for demand — fell below 9 million barrels a day for the first time since early June, US Energy Information Administration data show. Stockpiles jumped by 3.4 million barrels and now sit just below a four-year seasonal high.

Business leaders and investors from around the world will gather in Singapore on July 30 at the Bloomberg Sustainable Business Summit to discuss economic uncertainty and volatile markets. The meeting also will explore how to drive long-term value for companies, investors and societies. Click here for more details.

Source: Bloomberg Europe

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Manuel

Political

Central Bank

Finance chiefs from the Group of 20 countries stressed the importance of central bank independence while pledging to boost cooperation in a joint statement issued on Friday after a two-day meeting in South Africa.

In their first communique since last October, a month before U.S. President Donald Trump's election victory paved the way for his subsequent tariff war, the ministers and central bankers highlighted the uncertainty in the global economy caused by conflict, trade tensions and frequent extreme weather events.

The issue of central bank independence had hung heavily over the meeting in South Africa's coastal city of Durban following Trump's repeated berating of Federal Reserve Chair Jerome Powell for not cutting interest rates, attacks that have roiled global financial markets.

"The significance of this motherhood and apple pie communique is that it exists at all, though its sprawling nature once again underscores the need for thorough G20 streamlining," said Mark Sobel, a former senior Treasury official who now serves as U.S. chairman of the Official Monetary and Financial Institutions Forum.

"Its strong and welcome defence of central bank independence stood out, given President Trump's misguided attacks on Chair Powell," he said.

The communique was reached in the absence of U.S. Treasury Secretary Scott Bessent from the two-day meeting, with Washington represented by Michael Kaplan, acting under secretary of the Treasury for international affairs.

Bessent also skipped the previous G20 finance chiefs' gathering in Cape Town in February, although Washington is due to assume the G20's rotating presidency in December.

"Central banks are strongly committed to ensuring price stability, consistent with their respective mandates, and will continue to adjust their policies in a data-dependent manner. Central bank independence is crucial to achieving this goal," the communique said.

South Africa's deputy finance minister David Masondo told reporters that the meeting outcomes contained in the communique were "consented to by all members" and centred on "strategic macroeconomic issues". When members have been unable to reach consensus on a statement in the past, they have issued a summary or "chair's statement" outlining various positions of members.

A White House official did not address Friday's communique specifically, but said Washington was "leaning towards a back to basics plan" when it takes over the G20 presidency.

The communique also recognised "the importance of the World Trade Organisation to advance trade issues", while adding that the body needed reform.

Reaching agreement is seen as an achievement even though communiques issued by the G20 are non-binding.

The group was founded to coordinate financial policy after the Asian financial crisis of the late 1990s, before expanding to state leaders during the 2008 global financial crisis.

"To achieve what we have done in this environment, I take it as a huge success," South Africa's finance minister Enoch Godongwana said after the meeting of the group, which also includes China, Russia, European and large emerging economies.

Josh Lipsky, chair of international economics at the Atlantic Council, said of the fact that the G20 issued a communique: "This is a positive sign going into the year of the U.S. presidency. It shows some kind of momentum."

WORDS CAREFULLY CHOSEN

While it referred to "extreme weather events and natural disasters" as economic challenges, the communique did not explicitly address climate change. The word "tariff" was notable by its absence from the document, which instead referred to "trade tensions".

Trump's tariff policies have torn up the global trade rule book and clouded the economic outlook almost everywhere. With baseline levies of 10% on all U.S. imports and targeted rates as high as 50% on steel and aluminium, 25% on autos and potential levies on pharmaceuticals, extra tariffs on more than 20 countries are slated to take effect on August 1.

The G20 communique also contained no mentions of Russia's invasion of Ukraine, a divisive point for the group, nor the conflict involving Israel and Hamas in Gaza. Instead, it mentioned "ongoing wars and conflicts" without elaborating.

At just over 2,000 words, the communique was less than half the around 5,000 words of the October 2024 document.

Source: Reuters

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Manuel

Cryptocurrency

Ethereum (ETH) registered significant improvements in the second quarter, including increased inflows of exchange-traded funds (ETFs), layer-2 activity, and liquidity, which enhance the prospects for the third quarter.

According to the “Charting Crypto Q3 2025” report by Coinbase and Glassnode, US-traded spot Ethereum ETFs captured $1.7 billion in net inflows last quarter, overturning the prior period’s outflows.

Institutional flows flip positive

Furthermore, layer‑2 throughput climbed 7%, while average user fees dropped 39%. This was followed by an 8% increase in liquid supply, while long‑dormant balances shrank 6%.

As a result of the improvements seen last quarter, the share of ETH held at a profit increased from under 40% to nearly 90%. Additionally, the total value locked on Ethereum reached $ 63.2 billion.

The improvements are also registered in the derivatives market, where daily perpetual futures turnover averaged $51.4 billion, up 56% quarter‑over‑quarter.

Aggregate inflows erased a first‑quarter $200 million leak and restored momentum for managers positioning ETH as the market’s second large‑cap crypto.

Futures open interest totaled $14.5 billion on June 30 despite a 6.9% quarterly pullback, highlighting deeper liquidity across regulated venues.

Meanwhile, options open interest stood at $ 5.3 billion, with derivatives desks also logging an 11% uptick in term‑futures volume, signaling growing hedging appetite.

Network activity and economics

Developers and users benefited from a 39% decline in base layer fees as rollups absorbed more transactions, sharpening the economics of on‑chain application deployment.

At the same time, Ethereum’s inflation rate remained modest, at approximately 0.75% annualized. This cushioned long-term supply pressure.

Staked ETH continued to climb, and the report plotted both total staked value and the associated annual yield among its core fundamentals tables.

On-chain analytics show that holders used the second-quarter price recovery to reposition. Liquid coins, defined as those moved within 90 days, rose 8%, whereas coins untouched for more than a year fell 6%.

This indicated controlled profit‑taking rather than wholesale distribution. ETH’s Net Unrealized Profit/Loss flipped from capitulation to optimism between the first and second quarters, aligning with market‑cycle models that track investor sentiment shifts.

The pool of coins sitting below cost plummeted from more than 40 million to fewer than 10 million over the same period.

DeFi collateral base and market share

Ethereum’s $63 billion total value locked (TVL) in the DeFi ecosystem is spread across lending, decentralized exchanges, and yield farming protocols.

Ether also expanded its slice of total crypto market capitalization alongside Bitcoin and Solana as investors rotated toward perceived blue‑chip assets.

Perpetual swap funding rates, tracked alongside Bitcoin and Solana, remained neutral to positive through late June, suggesting balanced speculative positioning rather than froth.

However, the report cautioned that sustained ETF inflows and favorable fee conditions must persist to maintain the second-quarter constructive backdrop.

Nevertheless, it noted that Ethereum now enters the third quarter with stronger institutional sponsorship, lower transaction costs, and a healthier on-chain profit profile.

Source: Cryptoslate

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Manuel

Central Bank

Forex

Chicago Federal Reserve president Austan Goolsbee on Friday expressed support for Jerome Powell and central bank independence when asked about pressure being applied by President Trump, saying the Fed chair is a “totally honorable guy.”

“I as well as a virtual unanimity of economists believe that central bank independence from political interference is absolutely critical to the operation of the Fed and of the economy,” Goolsbee said in an interview with Yahoo Finance.

“If you just look at places where they do not have independence for the central bank inflation is higher, growth is worse, unemployment and the job market do worse, and everyone knows that.”

He added that "it pains me to hear people actively discussing whether the central bank should be independent. There's nothing good can come of discussion like that."

His response follows an intense period of pressure from Trump and other White House officials frustrated with Powell’s wait-and-see approach to interest rates and his cautionary comments on the possibility of persistent inflation from Trump’s tariffs.

Trump’s allies in recent weeks used another tactic to turn up the pressure on Powell: They invoked a $2.5 billion renovation of the Fed’s headquarters as a way to question the chair’s management of the institution and whether he told Congress the truth about the project.

This past week Trump denied that he was planning to fire Powell imminently, but also left the door open to that possibility.

Goolsbee said he is a "big admirer" of Powell and considers him a "totally honorable guy" as well as a "first ballot hall of famer" without addressing any of specific criticism coming from the White House.

Goolsbee on Friday also echoed Powell’s caution on cutting interest rates, saying that “we don’t know until we know” how inflation will be affected by the “drip drip” of tariff announcements. Powell has been arguing that more time is needed to know if any of Trump's tariffs push inflation higher this summer.

Goolsbee said he is seeing tariffs push up prices on goods, but not spilling over into prices for services, saying that still keeps him in a “wait and see” mode.

A rolling, staggered implementation of tariffs, he noted, makes it more difficult to argue the impact of tariffs will be just be a one-time increase in prices.

“Anything that makes it harder to figure out if we are on a path back to 2% inflation is extending the timetable of when the rate cuts can happen,” said Goolsbee.

He declined to say whether he sees rate cuts in the fall months of this year, noting that if there are multiple more months of benign readings on inflation he would feel more comfortable cutting.

But if he started to see a ramp up in prices with higher tariff rates, then he said he would have to assess the impact.

“Rates can come down, but we don't know if we're on the path to 2% inflation because we don't know on tariffs on energy prices and geopolitics,” said Goolsbee. “We're going to have to wait and see what what's happening in the data.”

Fed governor Christopher Waller said Thursday he believes the central bank should cut rates at the next policy meeting on July 29-20, as he again argued that any inflation from tariffs would be temporary, underscoring a divide within the central bank.

He also hinted he may dissent at the July meeting if his colleagues decide to hold rates steady, which is what investors expect will happen. Odds priced in by traders for a rate cut in September only sit at nearly 60%.