US stocks hit record high as inflation holds steady at 2.7% in July despite Trump’s tariffs

{"text":[[{"start":null,"text":"

"}],[{"start":16.69,"text":"US stocks hit another record high on Tuesday, as a steady inflation figure prompted traders to increase bets that the Federal Reserve would cut interest rates next month."}],[{"start":28.29,"text":"Wall Street’s S&P 500 index gained 1.1 per cent and the tech-heavy Nasdaq Composite climbed 1.4 per cent to close at new peaks after the Bureau of Labor Statistics reported that US inflation in July held steady at 2.7 per cent. Economists expected 2.8 per cent."}],[{"start":49.08,"text":"The consumer price index reading came despite concerns from some economists that the aggressive tariffs US President Donald Trump announced over recent months would push inflation higher."}],[{"start":61.46,"text":"The US dollar and Treasury yields slipped as investors bet on a faster pace of rate cuts by the Fed following the data release."}],[{"start":72.69,"text":"Futures markets were pricing in a 94 per cent chance of a quarter-point cut at next month’s Fed meeting, compared with about 85 per cent before the inflation data."}],[{"start":85.12,"text":"The two-year Treasury yield, which reflects interest rate expectations, was down 0.02 percentage points on the day at 3.73 per cent."}],[{"start":95.05000000000001,"text":"Trump hailed the BLS’s inflation numbers as evidence that his tariff regime was working — and poured scorn on his critics."}],[{"start":103.80000000000001,"text":"“Trillions of Dollars are being taken in on Tariffs, which has been incredible for our Country . . . Tariffs have not caused Inflation, or any other problems for Country,” he wrote on his Truth Social platform."}],[{"start":117.64000000000001,"text":"He also criticised Goldman Sachs and the bank’s chief executive David Solomon for refusing “to give credit where credit is due”, arguing that they had “made a bad prediction a long time ago on both the Market repercussion and the Tariffs themselves, and they were wrong”."}],[{"start":134.44000000000003,"text":"He said Solomon should recruit a new economist or “just focus on being a DJ”, a reference to the Goldman boss’s musical interests."}],[{"start":144.34000000000003,"text":"Goldman declined to comment on Trump’s post."}],[{"start":147.92000000000004,"text":"The July CPI figure was weighed down by weaker fuel prices, with the index for petrol down 9.5 per cent over the past 12 months."}],[{"start":157.45000000000005,"text":"Core inflation, which strips out volatile food and energy prices, rose to 3.1 per cent, surpassing expectations of a smaller rise to 3 per cent from June’s 2.9 per cent."}],[{"start":171.58000000000004,"text":"Analysts said traders were enthused by the benign headline numbers — and the expectation that the Fed would now be more inclined to lower borrowing costs."}],[{"start":182.76000000000005,"text":"“The relief in the market is because traders were scared the number would be much higher,” said Stan Shipley, fixed-income strategist at Evercore ISI."}],[{"start":192.69000000000005,"text":"“I think it cements a September rate cut at this point,” said John Velis, macro strategist at BNY, noting that Tuesday’s data comes in the wake of weak labour market figures that also support the case for the Fed lowering borrowing costs."}],[{"start":null,"text":""}],[{"start":209.23000000000005,"text":"Stephen Miran, whom Trump last week said he would nominate to the Fed board, said: “There continues to be no evidence whatsoever of any tariff-induced inflation.”"}],[{"start":221.27000000000004,"text":"The impact of the duties has so far been slow to trickle through to consumers, with businesses in some cases absorbing the cost increases. But there are increasing signs the burden will be shifted in the months ahead."}],[{"start":237.75000000000003,"text":"A small business optimism index released last month by the National Federation of Independent Business showed 32 per cent of companies planned to increase prices, the highest reading since March last year."}],[{"start":252.14000000000004,"text":"Diane Swonk, chief economist and managing director at KPMG, said rises in US inflation in recent months, especially in import-reliant categories such as tools, appliances and furnishings, showed that “the tariffs have begun to bite”."}],[{"start":269.98,"text":"“We expect more price increases” as companies begin to raise prices, she said, adding: “This is only the beginning.”"}],[{"start":278.03000000000003,"text":"Mike Zigmont, co-head of trading at Visdom Investment Group, said that although Tuesday’s CPI data “isn’t amazing, it is good enough to give the all-clear signal to stock investors”, justifying Wall Street’s move to a new peak."}],[{"start":294.28000000000003,"text":"“The water looks warm, the returns are growing, the S&P is up 9.5% year to date . . . Obviously, the future can burn anyone and everyone. For the moment, capital has to flow into US stocks.”"}],[{"start":308.86,"text":"The latest inflation reading came in the midst of a campaign by the president to pressure Fed chair Jay Powell into reducing interest rates, currently at 4.25-4.5 per cent, by as much as 3 percentage points."}],[{"start":324.51,"text":"Treasury secretary Scott Bessent said in a Fox Business interview on Tuesday afternoon that the Fed should consider cutting rates by half a percentage point at its September meeting."}],[{"start":335.78999999999996,"text":"Trump said on Tuesday he was “considering allowing a major lawsuit against Powell to proceed”, referring to what he described as the Fed chair’s “horrible, and grossly incompetent” management of a renovation of Fed buildings."}],[{"start":352.47999999999996,"text":"The data from the BLS comes after Trump sacked the head of the agency earlier this month, following a July jobs report that showed a sharp slowdown in hiring over the summer."}],[{"start":377.50999999999993,"text":""}]],"url":"https://audio.ftmailbox.cn/album/a_1755043740_8431.mp3"}