Economic News

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This continuation of Trump's on again off again day to day tariff decisions makes me believe even more that his intent is to manipulate the stock market.

Trump : sell my holdings today because I will be announcing more 100% tariffs tomorrow

Trump: buy back my holdings today because I will be announcing tomorrow there will be a pause on 100% tariffs and hinting about some great trade agreements coming soon

rinse and repeat

 


Short version: Drought reducing feedstock for cattle has led to a shortage of supply while demand remains robust. Due to the generation time of cattle it could take the rest of the decade to rebuild supply of American cattle. Tariffs on foreign beef keep U.S. beef competitive as they rebuild their stock but also consumer prices high and higher interest rates also take a toll.

More here: Beef Prices Are Near Record Highs. What’s Going On? - NerdWallet

“… U.S. cattle producers export beef to a variety of countries, including China, and those exports are threatened by the ongoing trade war.

That means beef exports will likely decline because importers in those countries won’t want to pay the steep tax that’s in place.

In the worst-case scenario, beef producers could go out of business without those markets … because producers are exporting beef that isn't in strong demand domestically.

While Americans love burgers, consumers around the world prize high quality steaks or other cuts of beef that don’t have the same appeal here. Cattle producers can export those products and get a higher price than they would if they sold them domestically...”
 

What Division Inside the Fed Means for Future Interest-Rate Cuts​

Fed Chair Jerome Powell has sketched out new conditions that could trigger rate cuts by summer’s end, but inflation remains a big question​


🎁 —> https://www.wsj.com/economy/central...8?st=EbQ54a&reflink=desktopwebshare_permalink

“… A rate cut isn’t expected this month. Instead, Powell has sketched out a middle ground where milder-than-expected price readings or softer employment data might be enough to justify cuts by the end of the summer—a lower threshold than more obvious signs of deterioration the Fed might have required when larger tariff hikes prompted forecasts of more sharp inflation increases.

Trump’s announcements of larger-than-expected tariff increases in April derailed Fed plans to resume rate cuts this year by creating concerns around a stagflation scenario, in which growth weakens and prices rise. In that environment, Fed officials would have likely needed to see the economy slow to have more confidence that price increases would be short-lived….”
 
nycfan said:

What Division Inside the Fed Means for Future Interest-Rate Cuts​

Fed Chair Jerome Powell has sketched out new conditions that could trigger rate cuts by summer’s end, but inflation remains a big question​


🎁 —> https://www.wsj.com/economy/central...8?st=EbQ54a&reflink=desktopwebshare_permalink

“… A rate cut isn’t expected this month. Instead, Powell has sketched out a middle ground where milder-than-expected price readings or softer employment data might be enough to justify cuts by the end of the summer—a lower threshold than more obvious signs of deterioration the Fed might have required when larger tariff hikes prompted forecasts of more sharp inflation increases.

Trump’s announcements of larger-than-expected tariff increases in April derailed Fed plans to resume rate cuts this year by creating concerns around a stagflation scenario, in which growth weakens and prices rise. In that environment, Fed officials would have likely needed to see the economy slow to have more confidence that price increases would be short-lived….”
Click to expand...
“… Since then, two developments have animated a possible shift. First, Trump has dialed back some of the most extreme tariff increases. This week, the president extended a window for bilateral trade negotiations with more than a dozen countries, revealing latent risks of a global trade war re-escalation after new Aug. 1 deadlines.

Second, tariff-related increases in consumer prices haven’t materialized, though many officials and economists expect price hikes in June and July data that will be reported beginning next week.

That is setting up a crucial test for competing theories about whether tariffs will prove inflationary and is inciting internal divisions over how to manage any costs if forecasts are wrong—in either direction.

It is much easier for businesses to absorb cost increases and avoid larger price hikes “if the average tariff is closer to 10% to 15% than if it’s the kind of levels that the president announced on Liberation Day, which were much higher,” said Robert Kaplan, a former Dallas Fed president who is now vice chairman of Goldman Sachs.

Because of weaker domestic demand and global overcapacity, tariffs “may not be as inflationary as we fear,” he said.…”
 


“It’s difficult to find a new job right now. Young people are struggling to land their first jobs and anyone who has been laid off is having a hard time. The labor market is frozen outside of healthcare, education and law enforcement jobs.”
 
nycfan said:


🎁 —> https://www.wsj.com/finance/the-wal...4?st=QAQj8w&reflink=desktopwebshare_permalink

Reads like a miniature version of the ABS / mortgage collapse of the Great Recession.
Click to expand...

This is probably my biggest economic worry right now. The BBB absolutely gutted the renewable energy industry, to the point we're virtually certain to see a cascade of bankruptcies over the next year or so. It's not a massive part of the overall economy but it's more than big enough to impact other sectors as well. I'm not sure if it will be as bad as the mortgage collapse in 2008, but it will almost certainly be much worse than the small bank failures in early 2023.

If this turns into what it could, it will be 1,000% the fault of Trump and the congressional Pubs who decided to use their lawmaking power to eliminate competition for the fossil fuel industry.
 
nycfan said:


Short version: Drought reducing feedstock for cattle has led to a shortage of supply while demand remains robust. Due to the generation time of cattle it could take the rest of the decade to rebuild supply of American cattle. Tariffs on foreign beef keep U.S. beef competitive as they rebuild their stock but also consumer prices high and higher interest rates also take a toll.

More here: Beef Prices Are Near Record Highs. What’s Going On? - NerdWallet

“… U.S. cattle producers export beef to a variety of countries, including China, and those exports are threatened by the ongoing trade war.

That means beef exports will likely decline because importers in those countries won’t want to pay the steep tax that’s in place.

In the worst-case scenario, beef producers could go out of business without those markets … because producers are exporting beef that isn't in strong demand domestically.

While Americans love burgers, consumers around the world prize high quality steaks or other cuts of beef that don’t have the same appeal here. Cattle producers can export those products and get a higher price than they would if they sold them domestically...”
Click to expand...

I don't care about $7/pound ground beef; I just care about the price of eggs...

How much are a dozen eggs at Walmart today ?
 
lawtig02 said:
This is probably my biggest economic worry right now. The BBB absolutely gutted the renewable energy industry, to the point we're virtually certain to see a cascade of bankruptcies over the next year or so. It's not a massive part of the overall economy but it's more than big enough to impact other sectors as well. I'm not sure if it will be as bad as the mortgage collapse in 2008, but it will almost certainly be much worse than the small bank failures in early 2023.

If this turns into what it could, it will be 1,000% the fault of Trump and the congressional Pubs who decided to use their lawmaking power to eliminate competition for the fossil fuel industry.
Click to expand...
Giveaway of the green energy sector to China.
 
lawtig02 said:
This is probably my biggest economic worry right now. The BBB absolutely gutted the renewable energy industry, to the point we're virtually certain to see a cascade of bankruptcies over the next year or so. It's not a massive part of the overall economy but it's more than big enough to impact other sectors as well. I'm not sure if it will be as bad as the mortgage collapse in 2008, but it will almost certainly be much worse than the small bank failures in early 2023.
Click to expand...
There's no chance it becomes nearly as bad as 2008. It's not going to be "much worse" than 2023. Google tells me that about $27B of solar loans have been securitized. In 2005-07, over $1T in residential loans were securitized. And that doesn't even count the side bets (e.g. CDOs and squareds).

This would be a hiccup at most. It would lead to a few thousand lost jobs, I'd imagine. Maybe a few tens of thousands. Even with downstream events, it's going to be a ripple at most.

The problem is that a thousand ripples can become a big wave.
 
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