The recent decline in the US economic growth rate below the level of the interest paid on the national debt is a warning sign, writes Jared Bernstein, who was chair of President Biden’s Council of Economic Advisers. “The interest rate our country pays on its debt has increased sharply, driven in part by government spending during the pandemic and by higher inflation. It’s shot up so much that it is now equal to our growth rate. That’s a potential game changer for debt sustainability.”

The bond and stock markets, so far, have reacted calmly to the new round of tariffs (with an Aug. 1 deadline) announced by President Trump on Monday. “The obvious inference is that markets for now are somewhat skeptical that Trump will go through with it, or alternatively they think compromises will be reached,” said Ben May, a director of global economic research at the consultancy Oxford Economics. “That’s probably the key element.”

Deflation deepens in China, according to a steep drop in factory-gate prices in June. China’s producer prices fell 3.6% in June from a year earlier, the largest decline in nearly two years.

White House economic adviser Kevin Hassett is considered a leading contender to be the next Federal Reserve chairman. Hassett met with President Donald Trump about the Fed job at least twice in June, according to a report by The Wall Street Journal.

The New York Fed’s survey of consumer expectations in June shows the inflation outlook edged down to 3% for year-ahead view. The pace matches January’s’ outlook.

Delistings of US home outpaced inventory growth in June, according to data published by Realtor.com. “Unlike past housing cycles where falling prices pressured underwater homeowners to sell, today’s homeowners benefit from record-high levels of home equity, so they have the flexibility to wait it out,” said Realtor.com senior economist Jake Krimmel. “This allows many sellers to withdraw their homes from the market if their asking price isn’t met.”

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