| Bloomberg Evening Briefing Americas |
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| Economists have long warned of collateral damage from Donald Trump's trade war, but after four months of cooler-than-predicted numbers, the US Bureau of Labor Statistics on Tuesday again reported that US inflation rose less than expected. However, unlike in previous months, the new data signaled that some companies are indeed starting to pass tariff-related costs on to consumers. As overall prices rose 2.7% in June from a year earlier, appliances jumped the most in nearly five years, toys increased at the fastest pace since early 2021 while household furnishings and sports equipment climbed by the most since 2022. Inflation Insights President Omair Sharif pointed out that excluding cars, core goods prices climbed 0.55% in June—the biggest monthly advance since November 2021. "Today's report showed that tariffs are beginning to bite," he said in a note. That said, the report has a little bit of everything for Federal Reserve policymakers who are divided as to whether tariffs will cause a one-time price shock or something more persistent. There's evidence of tariff pass-through for officials inclined to keep interest rates elevated, and yet few signs of a broader reverberation for those who are ready to lower them. Investors still expect the central bank to leave rates unchanged once again at its meeting in two weeks. Economists expect price pressures to intensify in the next few months, especially if Trump follows through on his latest threats of new levies against the European Union and other countries. —Jordan Parker Erb | |
What You Need to Know Today | |
| The expectation that the Fed will stay the course was bad news for Treasury yields, which resumed climbing. Short-dated yields most sensitive to changes in the Fed's policy rate led the move, rising more than four basis points as yields across tenors reached the highest levels in several weeks. The 30-year bond's yield touched 5% for the first time since early June. | |
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| Canada and the US still have one thing in common. Canadian consumer prices also are accelerating as underlying price pressures firm up, making it more likely the nation's central bank will put off cutting interest rates later this month. Canada's CPI rose at a 1.9% yearly pace in June, accelerating from 1.7% in May. On a monthly basis, the index edged up 0.1%. Both figures matched the median projections in a Bloomberg survey of economists. | |
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| The US housing market is losing steam, with prices in more than half of the country's top 100 housing markets now below their peak. The annual nationwide price increase slowed to 1.3% in June, the slowest pace in two years and down from 1.6% the previous month. Persistently high mortgage rates, which make monthly payments unaffordable for many Americans, continue to drag on housing demand. | |
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| JPMorgan Chase's investment bankers eked out a surprise gain in the second quarter, signaling what may be the start of a dealmaking rebound after widespread hesitation tied to US tariff policies. Investment-banking fees climbed 7%, the bank said in a statement Tuesday, while analysts were expecting a 14% decline. The firm's stock traders notched their best second quarter ever, and fixed-income trading trounced expectations. The better-than-expected investment-banking results may give a first glimpse into how the Trump administration's whipsaws on tariffs affected results. | |
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| US Treasury Secretary Scott Bessent suggested that Federal Reserve Chair Jerome Powell should step down from the central bank's board when his term as chair is up in May 2026. Powell's term as a Fed governor doesn't end until January 2028, making it possible for him to remain at the central bank—and to participate in monetary policymaking—even after his tenure as chair. In an interview with Bloomberg Television, Bessent—a former hedge fund manager seen as a candidate for Powell's job—said "there's a formal process that's already starting" with regard to identifying the nominee to become next Fed chair. Powell has repeatedly declined to answer questions on whether he might stay on as a governor. | |
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| The US Department of Justice shut down two investigations into Polymarket just as Trump's White House seeks to give the industry a boost. Polymarket's popularity surged during last year's election campaign as users flocked to the platform to place cryptocurrency wagers on the outcome. But that also drew investigators, examining whether the site was accepting trades from US-based users in violation of a previous settlement with federal regulators. The decision by the Trump administration to shut down the probes is the latest example of US authorities reversing course on Biden-era actions involving digital-asset firms. Some in Washington (but not everyone) are celebrating what's being billed as "Crypto Week" with plans to usher in industry-backed rules that have sent the price of Bitcoin to a record.  Shayne Coplan, founder and chief executive of Polymarket, speaks during the DealBook summit in New York on Dec. 4. Photographer: Michael M. Santiago/Getty Images | |
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| Citi is preparing to launch a premium credit card, returning to a competitive field as more banks target high-end customers with elaborate rewards offerings. The bank is planning to launch a card named "Strata Elite" in the third quarter of the year that "rounds out our family of proprietary rewards cards." The launch comes shortly after JPMorgan announced it would hike the annual fee on its popular Sapphire Reserve credit card to $795 and launch a similarly priced version for businesses as part of its latest foray. American Express is also planning its "largest investment ever" in its travel-focused Platinum credit cards. | |
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What You'll Need to Know Tomorrow | |
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| Bloomberg Power Players New York: Set against the backdrop of the US Open Tennis Championships, we'll bring together influential voices from the business of sports to identify the next wave of disruption that could hit this multitrillion-dollar global industry. Join us on Sept. 4. Learn more. | |
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