Macro turns hawkish on FOMC sticky inflation talks, while US credit goes negative.

• US: GDPNow 1.3% vs 1.4%; Credit -$0.18B vs $16.9B; MBA -2.2%
• FOMC: 9/18 see hike; inflation focus
• C/A: JP ¥3.968T; FR -€0.1B; SK $38.61B
• RBNZ: +25bp to 2.5%; AU Building -1.1%
Next:
• US Jobless/EHS, CN CPI/PPI Jul 9
• UK RICS, DE Trade, JP Orders Jul 9
🇺🇸 US macro got more uncomfortable.
GDPNow slipped again:
→ 1.3% vs 1.4% expected
→ down from 1.4%
It keeps the “positive growth, no acceleration” story alive.
Bigger shock was consumer credit.
It flipped negative:
→ -$0.18B vs +$16.90B expected
That is ugly.
Credit growth just disappeared.
And housing demand stayed soft too:
→ MBA applications -2.2%
→ Purchase index 169.5 from 170.6
→ Market index 266.3 from 272.2
→ 30Y mortgage rate 6.58% from 6.57%
So the US consumer picture is getting squeezed from both sides:
→ weaker credit impulse
→ still-high mortgage rates
→ softer housing activity
→ GDPNow drifting lower
🇺🇸 FOMC made the policy side worse for risk assets.
Minutes flagged sticky inflation, tariff pressure, energy risk, AI-linked demand and stronger upside inflation risk.
Dot-plot context was the key part:
→ YE26 median rate lifted to 3.8% from 3.4%
→ 9 of 18 officials see at least one 25bp hike by year-end
So cuts are not the base case anymore.
Fed is basically saying:
growth is still alive, labour is still resilient, inflation is still too sticky, and geopolitical/supply shocks can make it worse.
🇯🇵 Japan’s current account was mixed.
Headline current account came in below estimate:
→ ¥3.968T vs ¥4.121T
Adjusted current account also missed:
→ ¥3.06T vs ¥3.19T
But household-side data from yesterday was still stronger.
So Japan’s external surplus is just less impressive than expected.
🇦🇺 Australia building data was exactly inline.
But the monthly drop still shows construction is not giving Australia a strong growth impulse.
🇳🇿 RBNZ delivered the expected hike.
Rate decision:
→ 2.50% vs 2.50% expected
→ up from 2.25%
🇫🇷 France looked a bit better on current account.
Current account improved to:
→ -€0.1B from -€0.6B
After yesterday’s weak French trade data, at least the broader external balance looked less bad.
🇰🇷 Korea improved too.
Current account rose to:
→ $38.61B from $28.29B
That is one of the cleaner external-sector positives today.
Geopolitical developments make the Fed problem worse.
US-Iran has moved into open bombing-cycle risk.
Oil already repriced higher.
Hormuz traffic is retreating.
And if energy or shipping costs stay elevated, the Fed’s sticky-inflation concern becomes even harder to dismiss.
Does weak US credit & trade finally force the Fed to soften rates
…or does Hormuz/oil risk keep the Fed locked into inflation-defense mode?