Global Data Pod Research Rap: Inflation monitor: June 2025

Jul 17, 2025

Michael Hanson, a Senior Global Economist at J.P. Morgan Global Research, joins to unpack the latest June CPI reports. The conversation reveals a stubborn global core inflation rate around 3%, influenced by unexpected gains in service prices, particularly outside Asia. They discuss the effects of tariffs on U.S. consumer prices, the complexities of vehicle pricing, and the implications for Fed policy as interest rates are anticipated to shift in late 2025. Insights into the broader economic landscape and its impact on global inflation trends are also explored.

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INSIGHT

Global Inflation Sticky at 3%

Global core inflation remains sticky around 3% annualized because services inflation unexpectedly firmed in June except in Asia.
Core goods inflation outside the US is stable, defying expectations of a disinflationary trend from China so far.

INSIGHT

Tariff Pass-Through Delayed

U.S. tariff pass-through to consumer prices shows initial signs but is more delayed and drawn out than expected.
Inventories increase and firms' hope for tariff reversals slow immediate pass-through to prices.

INSIGHT

Exporters Absorbing Little Tariff Impact

China export prices to the US are slightly declining but the scale is tiny compared to tariff hikes, implying minimal price absorption by exporters.
Most tariff costs are likely borne by US businesses and consumers rather than foreign exporters.

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Nora Szentivanyi is joined by Michael Hanson to discuss key takeaways from the June CPI reports and key drivers shaping the outlook. Global core inflation remains stuck close to a 3%ar following a broad-based––and somewhat unexpected––firming in services inflation (ex Asia) in June, and broad stability in core goods inflation. US inflation data show increasing evidence of tariff pass-through to core goods prices but overall core inflation has still come in softer than we expected in recent months. We continue to expect a rotation in core inflation towards the US, but have scaled back the size of this projected US-RoW inflation gap while also pushing back its expected timing. A synchronized slowing in global growth alongside moderating wage inflation is likely to weigh on service price pressures more broadly while core goods inflation should ease modestly outside the US once the front-loading lift unwinds and transshipments from China are closed off.

Speakers:
Nora Szentivanyi, Senior Global Economist
Michael Hanson, Senior Global Economist

This podcast was recorded on 17 July 2025.

This communication is provided for information purposes only. Institutional clients can view the related report at:

https://www.jpmm.com/research/content/GPS-5030422-0

https://www.jpmm.com/research/content/GPS-5031696-0

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