NAB Morning Call ‘No preset course’ says Powell, as Fed waits longer
Jul 30, 2025
The podcast dives into the Federal Reserve’s unexpected hawkish stance and the lingering fears around inflation due to tariffs. It highlights the troubling figures behind the US GDP growth, revealing the misleading indicators fueling optimism. A proposed 50% tariff on copper imports is discussed, raising concerns about market reactions and corporate pricing strategies. Additionally, insights into potential rate cuts by the Reserve Bank of Australia are explored, alongside key economic indicators that could shape future market dynamics.
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Fed Holds Rates Amid Tariff Uncertainty
- The Fed is holding rates and markets see a September cut as a 50-50 chance now.
- Uncertainty comes from early stages of tariffs' inflation impact affecting goods prices and company pricing strategies.
US GDP Growth Masks Domestic Slowdown
- Q2 US GDP growth was stronger than expected at 3% annualized but driven by a fall in imports.
- Underlying domestic demand showed slowing growth, while the labor market remains tight.
US Growth Outperforms Europe
- US economy grew 2% year-on-year while Eurozone GDP grew 1.4% year-on-year.
- US outperformance explains the stronger US dollar and weaker euro, challenging narratives of fading US growth leadership.