Economic News | Fed extends wait & see posture on interest rates

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Schumer isn't only protecting federal workers. Look, there's no playbook here. I wanted the Dems to use the filibuster, but there are risks in that:

1. The courts are currently our best option of resistance. Risking a judicial shutdown is self-defeating.
2. The GOP wants the government shut down. Very good chance they won't reopen it. Also, if we do shut it down, then the reopening bill would be subject to presidential veto. And we know Trump wants it shut down, because Trump has no intention of stopping. Shutting down the government would allow him to rampage with little resistance whatsoever.
3. What Trump and Musk are doing is exceedingly unpopular, and it's going to get more so. We don't need to blur the lines of accountability. My sense is that the lines won't be blurred: people will do what they always do, and blame the party in power. But we don't know if that's what will happen.
4. There are a lot of other people, besides government workers, who would suffer from an extended shutdown and again, there's no reason to think that it would reopen any time soon.

The debt ceiling is a better opportunity, because the GOP doesn't want to crash the financial system. Well, most of the GOP, at least.

I'm really of two minds here. I can see the arguments both ways.
 
Paine said:
Schumer’s buddies on Wall Street seem to be behind this utter disarmament by the Democrats. Is it any surprise that Schumer and Gillibrand seem to be the main ones pushing to vote for cloture?
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I am positive that Schumer's buddies on Wall Street are not behind this. Schumer's buddies on Wall Street definitely understand the long-term damage of MAGA. I would very much doubt there are any liberal folks on Wall Street who would are saying, "yeah, let's keep the government open so Trump can continue wrecking the economy." They are thinking about how to defeat Trump.

You've got to get over the reflexive habit to blame "Wall Street" for everything that happens.

There are no good answers here.
 
What’s the argument for Trump wanting a shutdown? It seems to me that the idea of Trump or Musk wanting a shutdown was a GOP head fake. Otherwise, why did they whip the votes so hard for the CR in the House? Why did Vance come out and say the GOP would be blamed for a shutdown?

I understand it’s a tough spot for Senate Dems, but I really do think the GOP would’ve taken the blame for the shutdown and not gotten anything out of it more than what they’re already doing. We’ve effectively been in a rolling govt shutdown since Trump came into office. The critical mass of a real government shutdown could’ve given Dems more leverage IMO.
 
rodoheel said:
The problem is that if Dems can't explain to voters what they're actually going to stand up for, voters will see no reason to choose them as an alternative to the Republican arsonists burning the government down.
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But is this how politics really works? What alternative did the GOP present in '10? None. They just capitalized on anger. Midterms are about anger at the party in control.

And anyway, whatever the Dems say now would be forgotten before next year anyway.
 
superrific said:
I am positive that Schumer's buddies on Wall Street are not behind this. Schumer's buddies on Wall Street definitely understand the long-term damage of MAGA. I would very much doubt there are any liberal folks on Wall Street who would are saying, "yeah, let's keep the government open so Trump can continue wrecking the economy." They are thinking about how to defeat Trump.

You've got to get over the reflexive habit to blame "Wall Street" for everything that happens.

There are no good answers here.
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I’m just thinking in terms of the stock market. It would tank even more with a shutdown.
 
Paine said:
What’s the argument for Trump wanting a shutdown? It seems to me that the idea of Trump or Musk wanting a shutdown was a GOP head fake. Otherwise, why did they whip the votes so hard for the CR in the House? Why did Vance come out and say the GOP would be blamed for a shutdown?

I understand it’s a tough spot for Senate Dems, but I really do think the GOP would’ve taken the blame for the shutdown and not gotten anything out of it more than what they’re already doing. We’ve effectively been in a rolling govt shutdown since Trump came into office. The critical mass of a real government shutdown could’ve given Dems more leverage IMO.
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Trump wants a shut down so he can declare an emergency and then arrogate all power to himself. That seems to have been a real concern of Whitehouse. It's not that Trump wants the government closed, per se. He just doesn't want to be bound by any laws. And the courts being out of session would be potentially catastrophic. It's the one locus of power that's actually able to resist.

I think you answered your own question: the GOP would be blamed for a shutdown had the House utterly failed. I think the GOP would be blamed for the whole thing, but do we know that?

Here's my read of the entire macro-political situation: Trump badly wants a Reichstag fire. He's itching so hard for something, anything that will give him an opportunity to declare a national emergency and then martial law. That's why he and his people are being especially provocative, even for them. I mean, he's declaring an "invasion" from migrants because he has no patience.

There's also a risk that the Pubs in the Senate will just get rid of the filibuster if they really wanted to pass the bill. While I support getting rid of it, obviously now is the very worst time for that to happen. I'm kind of shocked it hasn't happened yet.

Also, there's the not-insignificant matter of DC. Apparently Schumer has gotten an agreement for a vote on whether to restore DC's funding, and I assume that will pass easily. If Dems don't look out for DC, who will?
 
Paine said:
I’m just thinking in terms of the stock market. It would tank even more with a shutdown.
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The people on Wall Street that might be advising Schumer don't really give a fuck about what the stock market does over the next two weeks or whatever. They have longer term horizons. And they realize the existential threat Trump poses to financial markets everywhere, and the global economy.

Whatever the market would do in a shutdown would pale in comparison to what the market would do if Trump assumes dictatorial powers.
 
Complex situation for sure. I hope this is the right choice. Might end Schumer’s career.
 
Paine said:
Complex situation for sure. I hope this is the right choice. Might end Schumer’s career.
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He's 74. He might be wrapping up his career anyway. I think the Dems are trying to get the old guard out -- hence Tina Smith and Maggie Hassan.

I think Schumer has been so visible on this because he wants to be the heat sink. Let the liberals train their fire on him, as he's headed out the door, and not take aim at Cortez-Mastro, Fetterman, Rosen, etc.
 


A guy with over half a billion dollars probably doesn’t need to settle for cheap bobbles, it is true. And claiming to focus on overall affordability rings hollow in the tariff whatever Trump feels like today environment.
 
nycfan said:


A guy with over half a billion dollars probably doesn’t need to settle for cheap bobbles, it is true. And claiming to focus on overall affordability rings hollow in the tariff whatever Trump feels like today environment.
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I wonder how the rich taste? Keep up what they're doing, and they may find out.
 
UNCMSinLS said:
I wonder how the rich taste? Keep up what they're doing, and they may find out.
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Yeah, we're living through a very tired and historically unremarkable pluto/kleptocratic revolution. The question remains, how bad does it get, for how many people? How uneven are the economic levers? How uneven are the means of violence? How uneven are the rhetorical talents? How uneven is the will?
 
Purple Nurple said:
So there would be a bit of a "detox" period as we adjust to less government spending. That's my only point. I don't find the administration's statement wild. The government spending $900 billion less than they did in the previous year is a big deal.
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Detox? Stop using the bullshit words of this administration.

Yes, there will be an adjustment. People who lost their jobs will be looking for new jobs. Companies that relied on those people will see a decrease in their patronage. Reasearch and other areas that lose that government money will either go away or have to find other funding.

You notice there's pretty much nothing positive in this? It's not like you or I get a refund of our unspent tax money, no that's being allocated to corporations and wealthy people in the form of tax cuts.

So, it basically boils down to cut cut cut so that we have more money for the rich. Sounds like something everyone outside of the top 10% can easily accept.
 


World shares rise, US futures slip after Trump vows to push ahead with tariff hikes​


“Shares rose in Europe and Asia though U.S. futures declined after U.S. President Donald Trump told reporters he would go ahead with more tariff hikes despite worries over their impact on the economy and markets.

… Chinese markets rose after the government reported stronger than expected factory data. Later Monday, officials briefed reporters about Beijing’s efforts to get consumers to spend more, seen as key to getting the economy out of its doldrums. Most economists have advocated broad and fundamental reforms to foster greater confidence and build consumer purchasing power. …”

——
Trump’s negative trade policies have provided China a golden opportunity to go ahead with economic stimulus and (relative) reform that Xi has long resisted — more bang for his buck, so to speak, as investors look for growth opportunities outside the United States.
 

“Higher U.S. tariffs on imports are set to slow economic growth and push inflation higher around the world, with further increases threatening an even more severe downturn, the Organization for Economic Cooperation and Development said.

In a quarterly report published Monday, the Paris-based research body cut its growth forecasts for most of the world’s largest economies over this year and next, the main exceptions being China, Argentina and Turkey.

… Its largest downgrades were reserved for the two economies that trade most heavily with the U.S. and face significantly higher barriers to their exports.

The OECD now expects Mexico’s economy to contract by 1.3% this year and 0.6% in 2026, having previously forecast growth of 1.2% and 2.8%.

For Canada, it now expects growth of 0.7% in both 2025 and 2026, having previously forecast expansions of 2%.

The OECD said the U.S. economy will now likely grow by 2.2% this year and 1.6% next. It previously forecast growth of 2.4% and 2.1%. …”
 
nycfan said:

How Republicans Learned to Love High Prices​

Donald Trump’s allies have pivoted from denying that his tariffs will hurt consumers to insisting that consumers should welcome the pain.

GIFT LINK 🎁 —> How Republicans Learned to Love High Prices

——
Alternate title: Take your medicine and like it, plebeians …
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“… The counterargument—until recently associated with the political left—is that cheap and varied consumer goods are not worth sacrificing the strength of America’s domestic-manufacturing sector. Even if we accept that (questionable) premise, however, it doesn’t justify Trump’s tariffs, because those tariffs will hurt domestic manufacturing too. About half of U.S. imports are intermediate goods, raw materials, and capital equipment that American manufacturers use to make their products and sell them here and abroad. Contrary to conventional wisdom, these imports increase domestic-manufacturing output and jobs. Thus, for example, an expanding U.S. trade deficit in automotive goods has long coincided with gains in domestic automotive output and production capacity, and past U.S. tariffs on steel and aluminum caused a slowdown in U.S. manufacturing output. Even if domestic manufacturers don’t buy imported parts, simply having access to them serves as an important competitive check on the prices of made-in-America manufacturing inputs. This is why Trump’s recent steel-tariff announcementgave U.S. steelmakers a “green light to lift prices,” as The Wall Street Journal put it.

…
Imports such as construction materials, medical goods, and computers also support many U.S. service industries. And imports are important for leisure and economic mobility. By trading for necessities instead of making them ourselves, Americans have more free time to use for fun or self-improvement (and more disposable income to pursue such things). According to a new studyin the Journal of International Economics, “between 1950 and 2014, trade openness contributed to an additional 20 to 95 hours of leisure per worker per year”—invaluable time we can devote to entertainment, family, community, or education.

“Access to cheap goods” isn’t the American dream, but it sure helps us achieve it. This is particularly true for low-income workers who have tight budgets and little leisure time. Shelter, food, transport, utilities, and clothes accountedfor approximately 68 percent of the poorest 20 percent of U.S. households’ annual expenditures but just about half of the richest 20 percent of households’ spending.

It’s easy for someone worth, say, $521 million, like Bessent, to pay a few bucks more for everyday goods and still achieve his goals and ambitions; it’s far more difficult for a single mom with four kids to do the same….”
 
nycfan said:

“Higher U.S. tariffs on imports are set to slow economic growth and push inflation higher around the world, with further increases threatening an even more severe downturn, the Organization for Economic Cooperation and Development said.

In a quarterly report published Monday, the Paris-based research body cut its growth forecasts for most of the world’s largest economies over this year and next, the main exceptions being China, Argentina and Turkey.

… Its largest downgrades were reserved for the two economies that trade most heavily with the U.S. and face significantly higher barriers to their exports.

The OECD now expects Mexico’s economy to contract by 1.3% this year and 0.6% in 2026, having previously forecast growth of 1.2% and 2.8%.

For Canada, it now expects growth of 0.7% in both 2025 and 2026, having previously forecast expansions of 2%.

The OECD said the U.S. economy will now likely grow by 2.2% this year and 1.6% next. It previously forecast growth of 2.4% and 2.1%. …”
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I don't know who is doing those economic projections, but that 2.2% growth figure for the US looks awfully optimistic.

GDP Now is now predicting 1Q to be at -2.1%. The adjustment for that weird gold effect from January appears to be about 2 points, so GDP Now is predicting flat or slightly negative.

1Q is going to be the best quarter. Is it going to get better in 2Q, when the ripple effects from the firings and closings and cancellations etc. more fully take effect, to say nothing of whatever tariffs may stick? The case for 2% growth seems really hard to see.
 
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