Bessent: New Fed Chief Must Go Beyond Monetary Policy

Nvidia and AMD have struck an unprecedented deal with the Trump administration: they’ll pay the U.S. government 15% of their China chip sales revenue in exchange for export licenses. The agreement, finalized after Nvidia CEO Jensen Huang met with President Trump last week, allows both companies to resume selling AI chips to China after months of restrictions. This marks a major shift in U.S. export policy—traditionally based on national security, not revenue generation. For Nvidia, the stakes are huge: being blocked from China cost them $4.5 billion in just one quarter. While the deal offers immediate market access, experts worry

New research from Goldman Sachs reveals a significant shift in who pays for tariffs imposed by the Trump administration. According to economists led by Jan Hatzius, American consumers have so far shouldered only 22% of tariff costs through June, with businesses absorbing the majority. However, this dynamic is changing rapidly as companies increasingly pass these costs to consumers through higher prices. Goldman predicts consumers will bear 67% of tariff costs if current patterns continue. The impact on inflation could be substantial, with core PCE inflation potentially reaching 3.2% year-over-year by December, compared to 2.4% without tariffs. This creates a complex

Markets are closely watching this week’s inflation data as the Federal Reserve faces mounting pressure to cut interest rates. The July Consumer Price Index (CPI) report, due Tuesday, is expected to show inflation rising to 2.8% annually, up from 2.7% in June, with tariffs driving the acceleration. The nomination of Stephen Miran to the Fed Board adds another voice potentially favoring rate cuts, as economists predict the Fed may need to act by September to avoid multiple dissenting votes. Meanwhile, retail sales data on Friday will provide crucial insight into consumer spending strength amid these economic crosscurrents.

President Trump’s aggressive trade policies and tariff regime are challenging the US dollar’s long-standing role as the world’s primary reserve currency. While the dollar currently dominates global transactions—used in 90% of foreign exchange trades and making up nearly 60% of government reserves worldwide—Trump’s approach to reshaping international trade is causing governments and investors to reconsider their reliance on US assets. This shift could reduce America’s economic leverage and its ability to fund budget deficits through foreign investment, potentially ending a key advantage the US has enjoyed since World War II.