Real slowdown risks

Daily update

US President Trump again called for lower US interest rates. Markets interpreted this as undermining Federal Reserve independence, and markets do not like that (US assets weakened). The coming US economic slowdown is driven more by rising risk than high rates. Borrowing to fund investment and consumption balances the cost of capital with uncertainty about the future. Rising uncertainty is the US problem.
Simplistically, real interest rates will decline in the face of the coming inflation surge. However, lower real rates boost economic growth when consumer or corporate incomes grow at a higher rate than the interest rate level. First-round inflation from tariffs only increases government income. If US manufacturers and retailers raise prices, using further rising tariffs as an excuse, that will lower their real borrowing costs (but consumers still suffer, and uncertainty still constrains companies).
ECB President Lagarde has a television interview today. Aside from the normal questions on the policy outlook, it would be interesting to hear their views on central bank independence (presumably a fan) and the euro as a reserve currency.
There are some US regional Fed business sentiment surveys. Sentiment surveys have long established quality problems with declining response rates and political polarization, and so these are more about media spin than economic substance.