Subran says inflation may still force a September Fed hike
According to BlockBeats on July 3, Allianz Chief Economist Ludovic Subran said that recent U.S. nonfarm payroll data was “actually weak,” but that this does not materially alter his inflation outlook. In his view, U.S. inflation could still peak above 3.7%, while artificial intelligence, fiscal stimulus, and the energy industry continue to provide support for economic growth.
Based on that combination, Subran said the Federal Reserve may have to raise rates in September. His remarks suggest that even if labor-market data softens, policymakers could still lean toward tighter policy if inflation remains sticky and growth drivers stay intact. For macro-sensitive crypto markets, that keeps the path of rates and dollar liquidity firmly in focus.
U.S.-Europe monetary policy divergence may deepen
Subran said this is where the “real divergence” between the U.S. and Europe lies. While he sees the Fed as potentially needing to tighten again, he does not expect the European Central Bank to take further action after last month’s move. He described that ECB hike as an “insurance hike,” adding that current data suggests the cycle may already have passed that point.
This distinction matters because markets are not looking at one uniform global policy backdrop. In Subran’s framing, the U.S. still faces a mix of persistent inflation pressure and resilient growth support, while Europe appears more focused on the delayed effects of previous tightening and a weaker macro transmission environment.
War-related economic scars remain, but near-term conditions have improved
On Europe’s broader outlook, Subran also said the traumatic effects of the Iran war will take time to show up fully in the economy. He noted that the economy is still bearing the cost of the war, but added that the situation is now much better than it was a few weeks ago. That implies the shock has not fully worked its way through, even if short-term stress has eased somewhat.
Overall, his message centers on three points: U.S. inflation risks are not over, the Fed may still need to act in September, and the ECB is less likely to follow with another hike after its latest move. At the same time, geopolitical damage remains part of Europe’s macro backdrop, even as immediate conditions have improved from recent lows. The comments were cited by Jin10 and reported by BlockBeats.