Stimulus and redistribution

Daily update

Oil prices are down and the optimism bias is up. There are hopes for an Iran-Oman settlement on post-war control of the Strait of Hormuz. This would probably mean tolls eventually (probably branded a “tariff” or an “environmental charge” according to political bias). A toll would be economically negligible. Iran cementing control of the Strait has implications for insurance, supply chain security, and Gulf infrastructure investment.
USD 100bn of the USD 165bn unlawful US tariffs has been refunded (with more to come). This is both fiscal redistribution and stimulus. US importers paid the tariffs, but the cost was passed to US consumers via higher prices. The rebates are paid to importers. Ending the tariffs did not generally lower consumer prices. Thus wealth has been transferred from US consumers to US importers with the Treasury as the middleman. The refunds are also a stimulus—small business proprietors and dividend-receiving shareholders may spend the money, or it may be invested.
China is reportedly seeking back tax payments, particularly from wealthy individuals, to finance its growing government deficit. This is a global trend. Global wealth ratios are at record highs, and governments will seek to “mobilize” some of that wealth.
The data calendar is once again a barren wasteland, with random sentiment polls the only offering.