Economics in the News – July 27 - Aug. 2, 2026
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Europe needs to increase its natural gas inventory for the winter while facing a natural gas shortage. Natural gas storage facilities used by households and businesses are at their second-lowest level since 2011, at only 54 percent capacity. However, the closure of the Strait of Hormuz has slowed energy shipments and is keeping prices elevated for consumers in the foreseeable future.
Europe last faced natural gas shortages when Russia invaded Ukraine in 2022. At that time, the European Union replaced Russian pipeline gas with liquefied natural gas that was mostly imported from the United States. In addition, the EU mandated seasonal regulations requiring members to meet storage benchmarks. By the end of the year, European countries must, by law, end imports of Russian liquefied gas, resulting in a 12 percent reduction of the gas supply and a greater need for imports from the US and other countries. While the majority of Europe’s natural gas is consumed in the winter months, countries seek to maintain elevated storage levels to avoid paying premium prices. [The New York Times]
o The 30-year Treasury yield rose 0.11 percentage points to 5.22 percent – marking its highest level in more than two decades. It also marks the largest one-day increase in a year. The 10-year Treasury yield also closed at its highest level of the year at 4.67 percent. The rise in the two after the Federal Reserve kept its short-term interest rates unchanged despite some investors anticipating a rate increase.
Resurgent inflation has become a concern for many investors due to the oil prices increasing due to the Iran war and spending on artificial intelligence (AI) infrastructure. Last week’s increases in Treasury yields suggest that investors are becoming increasingly concerned that high inflation could be around for decades to come. [The New York Times]
o The Japanese yen was trading at its lowest level against the US dollar in four decades before the US and Japanese governments stepped in a first-time joint intervention in an effort to boost the yen. The yen’s decreasing value indirectly threatened US interest rates and plans to pull $550 billion of Japanese investment in the US.
American intervention in currency markets on behalf of another country is rare, as a hands-off approach has long been favored by US policymakers except in rare instances. In 2011, the US stepped in to weaken the yen after it was surging following a major earthquake. The last time the US stepped in to strengthen the yen was in 1998 during the Asian market crisis that caused chaos in global markets. Earlier this year, the US setup a swap line with Argentina to provide access to US dollars. [The Wall Street Journal]
o Opposition from European countries led to FIFA abandoning its plan to sell stakes in the World Cup to private investors. Earlier in the week, FIFA announced that it would create a commercial venture to capitalize on its tournaments, following the monetary success of this year’s World Cup in the United States. The plan called to sell a minority stake to private investors.
European countries threatened to boycott FIFA’s tournaments, including the next World Cup, if it was to come to fruition. While European soccer’s governing body UEFA was the most outspoken, governing bodies in North and Central America, as well as Asia also strongly opposed the plan. [NPR]
o Plant-based milk has been in the mainstream for more than a decade. Now, dairy milk is having a comeback. Retail sales for dairy-free milks have regressed by five percent for each of the past three years. The decline is largely due to a long list of additives while dairy milk only has one ingredient. Dairy milk retail sales total near $18 billion in annual sales.
The decline is having dairy-free milk alternative producers to change their strategy. Some producers are rolling out higher protein products, while several brands in the UK discontinued altogether. While households in the 2010s sought to shun animal products in favor for more environmentally friendly ingredients, today consumers are seeking fewer and simpler ingredients in their food choices. In addition to aligning closer with their health goals, cow milk is also less expensive to buy. The average price for a gallon of milk is $4.22, according to May data from the Department of Agriculture. By comparison, some plant-based milks can cost up to $4 or $5 per half-gallon. [Bloomberg]
