U.S. Inflation Risks Surge Amid Trade Tariffs and Economic Uncertainty

U.S. business activity slightly decreased in June, overshadowed by rising inflation linked to tariffs on imported goods. The Federal Reserve's decision to halt interest rate cuts and escalating tensions in the Middle East add complexity. Manufacturing optimism persists, but consumer pressure intensifies, suggesting economic slowdown risks.

U.S. business activity showed signs of slowing in June as inflationary pressures from aggressive tariffs under President Donald Trump intensified. The Federal Reserve paused its interest rate cuts amid these concerns, which have impacted the housing market, with May marking the slowest home sales since 2009.

Increased uncertainty due to shifting trade policies and rising tensions in the Middle East add layers of complexity. The PMI readings suggest moderate economic expansion, but underlying data reveal weaknesses exacerbated by tariffs, casting shadows on the economy's trajectory.

Economists are concerned about inflation acceleration from June, with tariffs driving up manufacturing costs. Despite a slight rise in employment, skepticism remains as unemployment numbers rise, signaling potential broader employment growth challenges.

(With inputs from agencies.)