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Everything's peachy (sort of)

| Posted by: Paul Donovan | Tags: Paul Donovan

US President Trump once again put the yoke of more taxes onto the shoulders of US consumers, with another trade tax. The effects of this tax will probably not be felt by consumers until after the mid-term elections. It takes several months for trade tax hikes to pass through into prices.

US President Trump suggested the US equity market would collapse in the event of impeachment. Impeachment (by the House) may be more likely than conviction (by the Senate), but neither seems highly probable. A conviction would lead to President Pence. Pence's economic track record gives no grounds for assuming a negative equity reaction.

On the subject of political change, Australia is going to get another prime minister. It must be a Friday. The Treasurer, Morrison, is to replace Turnbull. The Australian dollar strengthened, having weakened over the course of the past couple of weeks.

The Jackson Hole summer camp for economists begins today. Fed Chair Powell is of course a lawyer, not an economist – which raises the question of whether a lawyer should attend a summer camp for economists. Powell's speech will probably have been written by someone with an economics degree, so that will make it worth listening to.