Global Markets Show Mixed Trend as U.S. Inflation Climbs
(MENAFN) Global financial markets showed varied performance on Tuesday as concerns grew over escalating U.S. inflation, largely attributed to the effects of tariffs.
At the same time, the Federal Reserve's direction for future policy remains ambiguous, with the central bank maintaining a prudent stance.
Data revealed that the U.S. Consumer Price Index (CPI) increased by 0.3% in June on a monthly basis, aligning with market projections.
However, on a yearly scale, it surged by 2.7%, exceeding expectations.
This marked the highest monthly inflation rate since January and the most significant annual rise since February.
The core version of the CPI — which excludes food and energy — also saw a rise of 0.2% from the previous month and 2.9% compared to the same period last year.
These figures were slightly below predictions, which had anticipated a 0.3% monthly and 3% annual uptick. For comparison, the core CPI rose by 0.1% month-on-month and 2.8% year-on-year in May.
According to analysts, the Federal Reserve might postpone any potential interest rate reductions due to ongoing tariff uncertainties.
The central bank is likely to wait for more definitive signs regarding inflation trends and the condition of the labor market.
While the chance of a rate cut in September has decreased, financial markets still reflect expectations for a total of two cuts later this year.
Attention is now shifting to the upcoming Producer Price Index (PPI) release, which investors hope will offer more insight into the trajectory of U.S. inflation.
In the political arena, the Federal Reserve is under growing pressure, particularly from U.S. President Donald Trump. Trump claimed that a 3-point rate cut would lead to annual savings of $1 trillion.
He also mentioned that Treasury Secretary Scott Bessent is being considered as a potential successor to Fed Chair Jerome Powell.
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