Economy

The European Central Bank kept its deposit facility rate at 2.25% on July 23, with the decision unanimous despite internal discussion about an immediate increase. Inflation data since June has softened, with headline inflation falling to 2.8% and core to 2.4%, but the ECB shifted its formal risk assessment to downside growth and upside inflation, removing earlier language about balanced risks. President Lagarde declined to set conditions for a September move, stating the outcome depends on incoming data including two inflation readings, second-quarter GDP, and wage figures.

South Korea's economy expanded faster than expected in the second quarter of 2026, with semiconductor-led exports rising 1.4% from Q1 and private consumption adding 0.4% growth. Real gross domestic income surged 15.6% year-on-year, its fastest annual increase in roughly 38 years, driven by improved terms of trade. The results arrived one week after the Bank of Korea raised its base rate to 2.75%, a decision made before the data were published but one that already cited export strength and above-target inflation of 3.2% as key concerns.

New Section 301 tariffs took effect at 12:01 a.m. Eastern on July 24, replacing the expired 150-day Section 122 tariff on imports from 60 trading partners. The rate structure splits partners into four treatment groups based on forced-labor import policies and existing most-favored-nation duties, with a universal exclusion list covering 2,120 tariff codes. Importers should verify eligibility under U.S. Note 52 and Annex II, as exclusions depend on end use and other conditions rather than applying automatically to entire tariff lines.

Japan's nationwide core consumer price index rose 1.6% year on year in June, a fifth consecutive month below the Bank of Japan's 2% target, with government energy subsidies suppressing part of the measured inflation signal. The core-core index, which excludes both fresh food and energy, came in at 1.7%, slowing slightly from May's 1.8%. The BOJ's Policy Board meets July 30-31 to issue a rate decision and quarterly Outlook Report, where the key question is how the board will assess subsidized energy prices against underlying inflation when considering further policy normalization.