US-EU Trade Deal Finalized with 15% Tariff; Fed Concerned Trump's Tariffs May Impact Inflation
Key Takeaways
- US and EU finalize trade deal with 15% tariffs, EU invests billions in US.
- Fed fears Trump's tariffs could undo inflation progress despite strong labor market.
- Ringgit declines amid trade uncertainties; Malaysia's GDP growth revised to 4.0-4.8%.
- Trump administration shifts government borrowing strategy, awaiting rate drops for longer-term bonds.
- Walmart raises prices due to new tariffs, maintaining 'everyday low prices' strategy.
Top Stories
US and EU reach trade deal with 15% tariff.
On July 27-28, 2025, the US and EU finalized a trade agreement in Scotland, setting tariffs at 15% on most EU exports to the US. The deal includes EU investments of up to $750 billion in US energy and $600 billion in other projects, boosting market sentiment and impacting global markets.
Fed concerned Trump's tariffs could undo inflation progress.
Federal Reserve policymakers are concerned that Trump's tariffs could undo progress in bringing inflation back to the 2% target, despite a robust labor market with the unemployment rate near historic lows at 4.2%.
Ringgit declines amid trade uncertainties, GDP growth revised.
On July 28, 2025, the ringgit closed lower against the US dollar, with Bank Negara Malaysia revising its 2025 GDP growth projection to 4.0-4.8% due to trade and tariff uncertainties.
Trump administration shifts approach to government borrowing and debt.
The Trump administration, led by Treasury Secretary Scott Bessent, is implementing a more dynamic strategy to government borrowing, willing to wait for rates to fall before issuing longer-term bonds, a shift from the Treasury Department's traditional approach.
Walmart raises prices due to new tariffs taking effect.
Walmart has started raising prices on various items due to new tariffs taking effect, while expecting to maintain its everyday low prices strategy and gain market share.
Finance Trends
Trend followers rapidly accumulating long positions in S&P 500, NASDAQ.
Bank of America's model indicates that trend followers are rapidly accumulating long positions in the S&P 500 and NASDAQ-100 indices, with positioning in U.S. equities continuing to build.
Global Economy
Federal Reserve rate decision and key economic data this week.
This week, investors are focused on the Federal Reserve's rate decision and key economic data releases, including the July jobs report. The Fed is expected to hold rates steady while analyzing mixed economic data.
ECB warns dollar-linked stablecoins could undermine euro area.
The ECB cautioned that the increasing use of dollar-linked stablecoins could undermine the euro area's monetary policy and financial stability, advising Europe to create a digital euro and strengthen stablecoin regulation.
US allies urged to unite against potential new tariffs.
A coalition of US allies, including the EU, Canada, and Mexico, is urged to form a united front and respond proportionally to threatened new tariffs from the US, representing over 50% of US goods exports.
Trump seeks trade fairness, sets August 1 tariff deadline.
On July 27, 2025, Donald Trump stated the EU won't benefit from tariffs below 15% and seeks trade fairness, setting an August 1 deadline for 30% tariffs while aiming for a 'fair' agreement with the EU.
President Trump's new tariffs expected to take effect.
President Trump's new tariffs are expected to go into effect on July 31, 2025, potentially leading to price increases for American consumers and businesses.
Philippines central bank to maintain easing bias, plans rate cuts.
The central bank of the Philippines plans to maintain its easing bias and is committed to implementing two interest rate cuts in 2025, contingent on economic growth data and inflation trends.