Allianz economist says the Fed may still need to hike in September
According to a July 3 report cited by BlockBeats, Allianz Chief Economist Ludovic Subran said that U.S. nonfarm payroll data was “actually weak,” but that softer labor data does not materially alter his broader inflation outlook. He said inflation could still peak above 3.7%, while artificial intelligence, fiscal stimulus, and the energy sector continue to provide meaningful support to U.S. growth. On that basis, he argued that the Federal Reserve may still have to raise rates again in September.
The significance of that view is that a single weaker macro print does not necessarily imply an imminent shift toward easier policy. Subran’s framework suggests that if inflation remains sticky and growth support from AI-related investment, government spending, and energy remains in place, the Fed may not yet have enough evidence to step away from a restrictive stance. For markets, that keeps policy uncertainty elevated even when headline labor indicators soften.
Subran highlights a deeper policy split between the U.S. and Europe
Subran said this is where the “real divergence” between the U.S. and Europe lies. In his assessment, the Fed may still need to tighten further, while the European Central Bank is unlikely to move again after its most recent rate hike last month. He described that ECB move as an “insurance” hike, implying that it was more precautionary than the start of a renewed tightening cycle. Based on the latest data, he suggested that step may already be behind the region.
That distinction matters for crypto and macro traders alike. A Fed that remains relatively hawkish while the ECB pauses would reinforce policy divergence across major economies. Such divergence can affect dollar strength, liquidity expectations, yield differentials, and overall risk sentiment. While Subran did not offer a direct market forecast, his comments reinforce the idea that U.S. macro resilience and European fragility are pulling central bank paths in different directions.
War effects are still passing through the economy, though conditions have improved
Subran also commented on the lingering economic impact of war, saying the traumatic effects take time to become fully visible. In his words, the economy is still bearing the cost of war, but conditions now appear better than they did a few weeks ago. That suggests the shock has not disappeared, yet the near-term backdrop may have become somewhat less severe than earlier fears implied.
Overall, his remarks deliver two key signals. First, weak payroll data alone may not be enough to rule out another Fed hike if inflation and growth remain resilient. Second, the ECB may be closer to the end of its tightening cycle than the Fed, reinforcing a widening transatlantic monetary policy gap. The original flash was published by BlockBeats and cited Jin10 as the underlying source.