Would Inflation be Higher Under Trump or Biden?

Would Inflation be Higher Under Trump or Biden? By Hardika Singh

A quarterly Wall Street Journal survey shows that most economists believe inflation, deficits and interest rates would be higher during a second Trump administration than if Biden remains in the White House. Meanwhile, higher rates crimped the profits of some of the nation's largest banks and left more consumers struggling to keep up with elevated borrowing costs. And a Supreme Court ruling could threaten various IRS regulations ranging from EVs to stock buybacks. Read on for this news and more.

Top News Economists Say Inflation Would Be Worse Under Trump Than Biden

Donald Trump loves to remind voters that President Biden has overseen the highest inflation in 40 years. But don't count on Trump, the presumptive Republican nominee for president, to bring inflation down faster than Biden if he wins the presidential election in November.

Pro Take: The Yield Curve Hasn't Been Alone in Predicting a Recession

By Bob Fernandez

The inverted yield curve has gotten a lot of attention for sending a false signal-so far-of a recession since late 2022. But the behavior of another indicator, the Conference Board's Leading Economic Index, reliable for more than 50 years, also sent out repeated warnings that a recession was on the way.

U.S. Economy Big Banks Continue to Feel Pressure From Higher Rates

JPMorgan Chase and Wells Fargo both reported a drop in quarterly profit Friday. Citigroup posted a rise in profit, driven in part by the bank's cost-cutting measures , but set aside more provisions for potential losses in their credit-card business.

Rate Cuts Could Make Things Worse for Banks Before They Help Financial Regulation Big Companies Get Boost in Tax Disputes

The Supreme Court's new limits on federal agencies' regulatory powers are rippling through the tax system , and they are poised to tilt some disputes against the government and toward large companies.

Forward Guidance Monday (all times ET)

8:30 a.m.: Empire State Manufacturing Survey

12 p.m.: Economic Club of Washington, D.C., event with Federal Reserve Chair Jerome Powell

Tuesday

8:30 a.m.: Retail sales

10 a.m.: NAHB Housing Market Index

Research Cooling U.S. Inflation Boosts Expectation Of September Rate Cut

U.S. price increases are moderating but there is still some work to be done, Global X's Scott Helfstein says in a note about June's producer inflation. PPI rose more than expected, following soft CPI data earlier last week. Helfstein says that cooling prices and increasing unemployment boosted market expectations of a September interest-rate cut by the Fed. Meanwhile, CME data shows markets pricing high odds of another hold this month followed by a cut in September. These odds likely reflect expectations that both inflation and labor will keep cooling. "A September rate cut may be too bullish on the Fed and too bearish on the economy," Helfstein says. - Paulo Trevisani

Basis Points Tenant evictions look stuck at elevated levels in several corners of the U.S., showing little sign of returning to what was typical before the pandemic. Eviction filings over the past year in a half-dozen cities and surrounding metropolitan areas are up 35% or more compared with pre-2020 norms, according to the Eviction Lab, a research unit at Princeton University. - Will Parker The heatwaves broiling tens of millions of Americans damage everything from roofs and cars to crops and roadways. Much of the multibillion-dollar fallout from extreme heat isn't covered by insurance , creating a gap for companies pushing new products. - Jean Eaglesham China's economy slowed sharply in the second quarter, piling pressure on the country's leaders to act more aggressively to rev up growth as they gather in Beijing to chart the course of the economy over the next half-decade. - Jason Douglas For years, Liuzhou and scores of other Chinese cities together amassed trillions of dollars in off-the-books debt for economic development projects. The opaque financing was the yeast that helped China rise to the envy of the world. Today, overgrown construction sites, sparsely used highways and abandoned tourist attractions make much of that debt-fueled growth look illusory and suggests China's future is far from assured. - Brian Spegele and Rebecca Feng China's central bank kept key policy rates unchanged on Monday, indicating a likely hold on the country's benchmark lending rate later this month even as signs of economic weakness raise expectations that easing may be in the pipeline. The People's Bank of China injected 100 billion yuan, or about $14 billion, worth of funds into the financial system via its medium-term lending facility, which will charge banks an interest rate of 2.5%. - Dow Jones Newswires Chinese home prices extended their run of declines in June, as Beijing struggles to resuscitate a real-estate market that was once a pillar of growth for the world's second-largest economy. Average new home prices in 70 major Chinese cities dropped 4.9% from a year earlier in June, widening from the 4.3% fall recorded in May, according to calculations by The Wall Street Journal. - Dow Jones Newswires Trade conflicts between the U.S. and China are heading to the bedroom . Retailers and manufacturers say Chinese companies are flooding American homes with cheap mattresses despite repeated U.S. government efforts to stop them. - Paul Berger About Us

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Hardika Singh in New York. Send your tips, suggestions and feedback to [[e-mail]].

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

07-15-24 0715ET