Inflation Rises in US, France, Spain Amid Global Energy Pressure

Inflation in the U.S. rose modestly in May, with core prices slightly above the Federal Reserve's 2% target, while Americans reduced spending and incomes declined partly due to tariff impacts and one-time Social Security adjustments. In Europe, inflation in France and Spain in June ticked up slightly, driven mainly by energy prices amid Middle East tensions, but these increases remain modest and are not currently alarming ECB officials. France's services inflation showed a rebound in June after a dip in May, influenced by rising accommodation, health services, and temporary energy cost spikes, complicating the ECB's efforts to balance inflation control with economic growth. Despite these developments, the ECB has continued to ease monetary policy with several rate cuts and signals that further easing is data-dependent, although some officials remain cautious about potential wage-price spirals. Market expectations reflect a high probability of the ECB maintaining rates in July with limited additional cuts anticipated later in the year, indicating a stable yet cautious outlook. Overall, both U.S. and Eurozone inflation remain near or slightly above targets, influenced by geopolitical factors and domestic economic pressures.