Will no one think of the economists?
- The UK and the EU are hinting that the transition part of the interminably tedious divorce process may be more interminable - lasting 33 months, not 21 months. Will no one think of the economists? To force us to keep talking about this nonsense for another year seems a cruel and unnatural punishment.
- The US has said China is not manipulating its currency. (Not true. The Chinese are trying to stop their currency weakening). The EU and the US are accusing each other of delaying auto trade talks. This is a risk. US President Trump will need something to tweet about if US consumers are taxed on all Chinese imports. EU autos are a tempting target.
- Central bank tightening will continue. The US Federal Reserve minutes support a hike, pause, hike, pause cycle. The Fed also signalled rates may rise above the long-term trend, suggesting that the economy is strong with upside risks, not strong with recession risks.
- US President Trump has said low inflation should stop the Fed raising rates. The Fed is trying to influence inflation out to 2020, not now. Most Americans' inflation rate is above the official number, and most Americans perceive inflation as being higher than it is.