Strong data on U.S. economic growth, another spike in trade tensions, and a cautious position from the Federal Reserve have reshuffled the landscape in global markets. The dollar index (DXY) surged to 99.3 — the highest since early June — ahead of the Fed meeting. Support for the 'buck' came not only from the numbers but also from signals: U.S. GDP grew an impressive 3% year-on-year in the second quarter, surpassing forecasts and contrasting sharply with the downturn in the first quarter.
However, behind the façade of strong growth lies the import effect: a 30% reduction in imports has become the main driver of growth, reflecting the 'stockpiling' effect in the first quarter due to expectations of new tariffs. Bloomberg and Investopedia analysts point out that the current growth is 'more statistical than structural' — domestic consumption and investment remain weak, and exports fell by 1.8%, demonstrating a decline in external demand.
Consumer spending, although it grew by 1.4%, still looks weak. This is the weakest growth in two consecutive quarters since the pandemic. Investment in fixed assets has almost stalled: a collapse in construction and a sharp slowdown in equipment. All this, according to Bloomberg, makes the structure of growth 'problematic,' especially in the context of a new wave of tariffs.
The labor market presents a mixed picture. ADP data showed an increase of 104,000 jobs in July, exceeding expectations and compensating for a decline in June. But alongside this, there was a noticeable reduction in the education and healthcare sector. The annual wage dynamics remained stable: 4.4% for those staying in place and 7% for job changers. Business Insider calls this combination 'a signal of recovery, but not overheating.'
Investors still do not believe in a rapid rate cut — and for good reason. Fed Chair Jerome Powell is likely to repeat the well-known formula: 'it’s too early to celebrate victory over inflation.' The lack of clear signals about rate cuts leaves markets in a wait-and-see mode. Reuters and WSJ confirm: at the Fed meeting, the rate will almost certainly remain unchanged, and the market is already pricing in nearly a 97% probability of this scenario. Goldman Sachs also indicates: the Fed may 'extend the pause' to avoid provoking inflation acceleration amid a possible increase in fiscal stimulus.
Against this backdrop, the yield on 10-year government bonds rose to 4.37%, reflecting not only the GDP data but also fresh information from the Treasury: the volume of placements will remain the same, but the agency will double the frequency of buybacks of long-term securities. This may ease pressure on the long end of the curve while signaling an attempt to control the structure of yields.
Additional nervousness was added by Donald Trump, who announced a 25% tariff on Indian goods starting August 1 and threatened new restrictions for cooperating with Russia in energy. According to Business Insider and The Guardian, this is just the beginning: the Trump administration is considering new measures against Europe and China. Goldman Sachs warns: 'increased protectionism could lead to a stagflation scenario' — especially if trade wars coincide with tightening monetary policy.
U.S. stock markets greeted this cocktail with restrained optimism. Futures on indices gained amid expectations of strong reports from major tech companies — Microsoft, Meta, and others. The main focus is on spending in the AI sector, where the capital race continues. DataTrek characterized the situation in a recent report as 'the golden mean': moderate growth, slowing inflation, and stable corporate profits. But with the caveat: 'any mistake in Fed communication — and the market will shift out of balance.'
Meanwhile, the mortgage market continues to lose momentum: mortgage applications fell by 3.8% in a week, reaching a low since May. The mortgage rate has hardly changed — 6.83% — but this was not enough to stimulate demand. According to MBA Vice President Joel Kahn, 'buyers are hesitant to take on large commitments amid economic and labor market uncertainty.' This is especially noticeable in the new purchase segment, where applications fell by 6%.
The U.S. economy shows decent statistics — but behind the strong headline lie temporary and unstable growth drivers. Bloomberg and Reuters analysts emphasize: real demand is sluggish, and the growth momentum comes from statistical effects and unstable external trade.
Markets are adapting to the new configuration: a strong dollar, a tough tariff front, and a 'silent' Fed that manages expectations without taking action. In conditions where investors are waiting for magical words from Powell, and Trump is once again waving the tariff club, uncertainty becomes not just a risk — it becomes an asset. Those who know how to work with it will benefit.