
Traders Brace As Crowded Data Docket Collides With Tariff Drama
Tariffs, tariffs and more tariffs.
That's a preview of what you can expect from financial media coverage in the days ahead.
Donald Trump's decision to move ahead with steep levies on imports from north and south set the stage for a contentious week defined by abrasive rhetoric, recrimination and, of course, retaliation, as America's neighbors grapple with a US president seemingly bent on engineering a diplomatic crisis with Canada and an economic crisis in Mexico.
New tariffs also jeopardize
In theory, wouldn’t the scope of the tariffs push down the borrowing estimates? We have no idea how long they might stay in place, but the revenue collection is immediate and substantial, right?
I saw once that the total tariffs would bring in about 1% of the annual budget if imports stayed at same level as they were for the entire year. Which is not likely as goal is to reduce imports. Therefore if these numbers were correct, it seems to tariffs are not a substantial revenue resource.
Trump, being a true believer in both tariffs and his own big brain (see autocratic rule), will continue to lean into both. Powell is a dead man walking a this point, not because of anything he’ll do wrong, but because he will continue to do what’s right.
Inflation is already back from my perspective, it seems Kroger and its wide array of outlets has already applied tariff adjusted pricing in it’s stores. I see this as an adaptation of the gas station model. When oil prices rise, gas prices rise to follow immediately; even though technically the gas station has not yet incurred the higher input price.
Powell will be forced to raise rates as that is his only mechanism to try to impact inflation. Trump will then fire him for being political or DE&I or whatever stupid language suits his autocratic ambitions. The next guy (it will most certainly be one) will then cut rates to appease him.
Trump will also become infuriated by his base getting upset about higher prices and then lean harder into tariffs as a means to ironically reduce prices because he doesn’t understand how they work. The end result? Some version of Turkey with low borrowing costs ultra high inflation and, a rapidly declining economy. War with someone (Mexico, China, Canada, everyone?) will be his next ambition as a foil to avoid accountability for his stupidity.
Putin’s special agent is delivering. Pushing US allies toward’s Xi’s smothering embrace,