Trumpflation?

Inflation has dominated the conversation in economic circles these past few years—but it’s also been a key political concern in elections from Argentina to India and now, of course, the US—where the perception of progress is increasingly tied to ideology rather than data. The Federal Reserve is widely expected to cut interest rates in September amid growing expert confidence that the runway is near. The Fed’s preferred inflation gauge has eased to 2.6%, not far off its 2% target, and the once overheated labor market has cooled to pre-pandemic levels. The rebalancing has been accompanied by moderation in consumer spending, as high prices and borrowing costs tamp demand and thus price pressures. And while that coveted economic soft-landing is in sight, the Fed made clear it’s walking a tight rope. “We don’t want to be to a point where we start to see the labor market weaken substantially—to falter—because by then, it is actually often too late to bring it back,” San Francisco Fed President Mary Daly said this week.

Democrats have boasted of the humming US economy, years of low unemployment and the near-victorious fight to crush inflation as the envy of the world. But the data and the message often fall flat with followers of Donald Trump. To be sure, Americans of all political stripes are still paying more for goods then before the pandemic. But while the GOP has been trying to blame Biden for residual inflation, it’s Trump’s plans that could undo the Fed’s hard-fought progress. Economists are warning that his policies—another round of tax cuts Democrats say will go to the rich, across-the-board tariff hikes to trigger another China trade war, and curbs on immigration that Republicans blocked earlier this year—will wreak havoc on global trade and send inflation right back up again.

Will he or won’t he? That’s the question top of mind for US political observers and media talking heads as weeks of pressure on President Joe Biden to drop his re-election bid continued. The focus returned to Biden, 81, after Trump survived an assassination attempt at a Pennsylvania rally, then, days later, accepted the Republican nomination in Milwaukee. Biden has doubled-down on his commitment to beating the twice-impeached Trump, saying he’s a threat to American democracy. But that’s collided with calls from more Democrats for Biden to step back following his botched debate performance last month. The Democratic National Committee said it won’t begin a roll call vote to officially select Biden as nominee until at least Aug. 1. But the more time that passes, the harder it will be for another nominee to get up to speed in time for the general election campaign.

Trump’s speech at the Republican National Convention was supposed to be a departure from his typically divisive rhetoric, focusing on themes of unity and gratitude after his narrow escape from death. Instead, his long, rambling and often disjointed delivery was dotted with references to fictional serial killer and cannibal Hannibal Lecter, his positive relationship with North Korean dictator Kim Jong Un and an attack on union leadership. The performance by the 78-year old Trump underscored to many Democrats that the election should be winnable. Trump also announced Ohio Senator JD Vance was his new Mike Pence, seeking to exemplify the far-right pivot Republicans have taken over eight years.

The Israeli military contends that after nine months of fighting Hamas in Gaza, it’s making major progress in destroying the group’s vast tunnel network. During that time, however, tens of thousands of Palestinians have been killed in the war that began with Hamas’s Oct. 7 attack on Israel, which killed 1,200 people. Israel’s parliament this week passed a resolution expressing formal opposition to the establishment of an independent Palestinian state. The move came as close to three quarters of all United Nations members have expressed support for, or recognition of, Palestinian statehood, and the top UN court issued a historic opinion declaring unlawful Israel’s occupation of the West Bank.

From airlines to hospitals, banks to restaurants, an unprecedented IT outage on Friday snarled computers systems around the world and highlighted the vulnerabilities of the modern global economy. The outages were the result of a botched update of a widely used cybersecurity program by software company CrowdStrike. “This is unprecedented,” said Alan Woodward, professor of cybersecurity at Surrey University. “The economic impact is going to be huge.” CrowdStrike said it rolled out a fix, but not before the IT failure grounded flights, upended markets and disrupted business globally.

One of the biggest pitfalls to electric vehicle adoption in the US has been a lack of public charging stations. But that’s starting to change. At the current pace of rollout, public fast-charging sites will outnumber gas stations in the US in about eight years. New York City is working on a tighter set of ride-share driver pay rules, the latest sparring between Uber, Lyft and city officials. The new pay rules comes after the ride-hail companies began locking drivers out of the apps mid-shift to reduce how much idle time could count toward drivers’ calculated pay.

Xi Jinping has a plan to fix his country’s faltering economy and offset the pain caused by the property crisis: climb up the value chain. Out with dirty, low-end manufacturing, in with a tighter embrace of green technology that will eventually power a post-fossil fuel world. This week’s Bloomberg Originals mini-documentary delves into some of the challenges facing Beijing’s effort—from domestic consumers who aren’t spending to a tense trade and geopolitical landscape with the West.

Get Bloomberg’s Evening Briefing: If you were forwarded this newsletter, sign up here to get it every to get it every Saturday, along with Bloomberg’s Evening Briefing, our flagship daily report on the biggest global news.