This is the web version of the WSJ’s economic newsletter. You can sign up for daily delivery here. Good morning! Today we look at the next salvo in the Trump administration’s global trade offensive, the Fed’s decision to raise interest rates, and the rather poor economics of the World Cup. TRUMP WEIGHS MORE TARIFFS ON CHINA The Trump administration is preparing to levy tariffs on tens of billions of dollars of Chinese goods. The move may come as soon as Friday and will likely spark heavy retaliation from Beijing. President Donald Trump hasn’t given his final approval and could have second thoughts, Bob Davis and Lingling Wei report. The U.S. wants Beijing’s cooperation on North Korea. But China has done nothing to do address concerns about its trading practices since initial warnings of $50 billion in tariffs. Reminder: Each round of tariffs by itself is fairly minor in the grand but they do add up. Barclays estimates fallout from U.S. steel tariffs could reduce global growth and raise inflation by 0.1 percentage point each. Add on the $50 billion against China and retaliation in kind, growth gets knocked down 0.6 percentage point and inflation bumped up 0.7 point. FED KICKS IT UP A NOTCH There’s no sign trade tensions have knocked the U.S. economy off course. Indeed, the Federal Reserve is picking up the pace of interest-rate increases this year and next to keep the economy on an even keel. Fed Chairman Jerome Powell said “the U.S. economy is in great shape.” But is it too great? Greg Ip writes that the Fed may have to run even tighter monetary policy, especially after 2020, if unemployment matches forecasts. Fed officials see the jobless rate dropping to a 50-year low of 3.5% by the end of next year, well below their estimate of where it should be in the long run. They’re also forecasting inflation holding roughly steady at 2.1% in 2018, 2019 and 2020. But so long as unemployment is below its natural rate, inflation will tend to go up. Are you starting to notice higher interest rates? Write to Jeffrey Sparshott at firstname.lastname@example.org, tweet to @WSJecon and visit wsj.com/economy for the latest. WHAT TO WATCH TODAY The European Central Bank releases a policy statement at 7:45 a.m. ET, and the ECB’s Mario Draghi holds press conference at 8:30 a.m. ET. The ECB may signal the winding down of its €2.5 trillion ($2.9 trillion) bond-buying program, though a decision on the stimulus is complicated by a recent slowdown in the eurozone economy and multiplying threats to growth, including trade disputes, surging oil prices and political turbulence in Italy. U.S. retail sales for May, out at 8:30 a.m. ET, are expected to rise 0.4% from the prior month. U.S. jobless claims, out at 8:30 a.m. ET, are expected to register at 225,000 U.S. import prices for May, out at 8:30 a.m., are expected to climb 0.6% from the prior month. The Federal Reserve holds an open meeting on rules for large financial institution at 2:10 p.m. ET. TOP STORIES DON’T SPEAK Jerome Powell is a man of fewer words. The Fed lopped 80 words off its postmeeting statement. One key phrase gone: “the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.” That amounted to policy makers saying they don’t expect to keep leaning with the economy, and that maybe they will need to start leaning against it, Justin Lahart writes. DRIVING INFLATION The Fed’s inflation target is 2%. The median forecast for 2018, 2019 and 2020 is 2.1%. And there are signs price pressures are emerging, albeit slowly. U.S. consumer prices notched their heftiest annual growth since the beginning of 2012 and a gauge of U.S. business prices rose again in May. Inflation is clearly firming, driven by higher energy prices, a tightening labor market and possibly tariffs. The transportation industry, for example, is confronted with higher diesel costs, trouble finding workers and strong demand for its services. Steel consumers are paying more for materials as trade tensions escalate. BENCHMARK THIS A small increase in an arcane interest rate, the federal-funds rate, might seem fairly distant. But it ripples through markets, affecting bond yields and borrowing costs for businesses and consumers. For example, rates on mortgages, which account for the biggest chunk of U.S. household borrowing, are near their highest levels since 2013, Paul Kiernan writes. Though rates are still moderate by historical standards, this year’s rise is enough to add about $100 to the monthly mortgage on an average-priced home in the U.S. with a 20% down payment. CHINA DOESN’T FOLLOW THE FED The People’s Bank of China decided not to follow the Fed. China’s central bank left a suite of key short-term interest rates unchanged as the country’s economy starts to feel pain from a monthslong effort to curb riskier lending, Liyan Qi, Grace Zhu and James T. Areddy report. Investment and retail sales slowed in May, official data showed, suggesting that the world’s second-largest economy is facing growing headwinds. BAD NEWS, BRAZIL. SORRY, RUSSIA Bad news, Brazil. It’s time for the World Cup. Sure, your team is a favorite to win. But that could be bad for your economy. Phil Suttle at Suttle Economics writes that in the past three World Cups, Brazil’s June industrial production fell an average of 0.9% from the prior month. It tends to bounce back in subsequent months, but “this could add to concerns about the health of Brazil as it approaches elections.” Another tidbit from the light-hearted piece of research: “Host countries have experienced [currency] devaluations in the calendar year following the World Cup in six of the nine competitions since 1982.” Sorry, Russia. QUOTE OF THE DAY “Our mandate has nothing to do with marijuana.” – Fed Chairman Jerome Powell, when asked whether banks should be able to provide services to marijuana businesses in states where the drug is legal TWEET OF THE DAY [wsj-responsive-sandbox id = "0" ] WHAT ELSE WE’RE READING When childcare is available, moms go to work. In an Institute of Labor Economics discussion paper, Martin Eckhoff Andresen and Tarjei Havnes use a major expansion Norway’s child-care coverage to look at effects on employment. “Compared to the prereform means, these effects imply an increase of around 50% in the mean employment rates of cohabiting mothers of two-year olds and suggest that child care plays an important role in getting mothers of small children (back) into the labor market.” The increased wages of the moms leads to more tax revenue, partially offsetting the cost of the program. Immigrants often flock to the same cities or neighborhoods—think Little Italy or Chinatown. But that might not be in the best interest of their children. “Our results indicate that exposure to a higher own-ethnic concentration impairs immigrant children’s host-country language proficiency and increases school dropout,” Alexander Danzer, Marc Piopiunik, Carsten Feuerbaum and Ludger Woessmann write in a CESifo working paper. UP NEXT: FRIDAY The Bank of Japan releases its policy statement. BOJ Governor Haruhiko Kuroda holds a press conference at 2:30 a.m. ET. The New York Fed’s Empire State manufacturing survey for June, out at 8:30 a.m. ET, is expected to slip to 18.0 from 20.1. U.S. industrial production for May, out at 9:15 a.m. ET, is expected to advance 0.2%. The University of Michigan’s consumer sentiment index for June, out at 10 a.m. ET, is expected to inch up to 98.3 from 98.0. American consumers have been broadly upbeat about current economic conditions and longer-term prospects.