Core Insights - The report by Thomas Hempel from Allianz Investment indicates that U.S. concerns over tariffs impacting the domestic economy may assist the EU in avoiding high import duties [1] - President Trump has pledged to impose a 30% tariff on EU goods starting August 1, creating a limited timeframe for both parties to negotiate an agreement [1] - Hempel notes that the potential rise in prices due to tariffs could enhance the EU's negotiating position [1] Economic Implications - The implementation of tariffs is expected to quickly reflect in U.S. prices, raising inflation concerns [1] - Charles Evans, President of the Chicago Federal Reserve, warned that tariffs are disrupting inflation forecasts and delaying potential interest rate cuts in the U.S. [1]

Core Viewpoint - The key issue for the Federal Reserve's upcoming meeting is the revision of economic forecasts and the dot plot, reflecting a slowdown in growth and persistent inflation despite recent surprising developments and a weakening labor market [1] Economic Predictions - Adjustments in economic policy expectations should indicate a slowdown in growth and that inflation is more persistent than previously anticipated [1] Labor Market - The labor market is showing signs of weakness, which may influence the Federal Reserve's cautious stance [1] Monetary Policy - In the context of stagflation risks and high uncertainty, the Federal Reserve is likely to reaffirm its cautious position [1] Interest Rates - The strategy anticipates that the Federal Reserve will maintain the key interest rate unchanged during the upcoming meeting, as long as hard data does not clearly justify easing policies [1]