Daily update
Daily update
- The Federal Reserve offered no surprises on rates. Fed Chair Powell tried to present the two dissenting views as being rationally based, but investors are bound to suspect that the rationale amounted to little more than an excited jumping up and down and shouting “pick me, pick me” in the general direction of the White House. The press conference gave a slightly hawkish tone in anticipating the trade tax inflation yet to come.
- US trade tax announcements now resemble something of a random number generator—US consumers are to pay 15% more for buying South Korean goods, and 25% more for buying Indian goods (but that may change). Taxes for copper consumers are gyrating wildly. For now, the general tenor of trade taxes is pretty clear economically, and the details are a concern at a sector level.
- Inflation dominates today’s data calendar. France, Italy, and Germany offer preliminary consumer price data. Unlike Spain’s numbers, disinflation forces are expected to direct the figures today.
- The June US personal consumer expenditure deflator is expected to be slightly higher—an inflation island amidst global disinflation. Only a tiny part of this reflects trade taxes— those effects come later. Consumer spending should offer some resilience, as savings and credit smooth spending power.