Finance chiefs, central bankers and a veritable who’s who of the macro universe will gather in Washington this week for the spring meetings of the World Bank and the IMF. The word “tariff” will come up a lot.
The mood will be sullen if perhaps not bleak. Hope springs eternal, but a sense of ironic foreboding will hang over the proceedings. These institutions are part and parcel of the multilateral, US-led international order which Donald Trump’s in the process of dismantling.
The meetings, which run from Monday to Saturday, will take place in the dark shadow of The White House where, less than a mile away, Trump will brood, grouse and commiserate with his inner circle about an agenda which has already pushed the US to the brink of a constitutional crisis.
Over the weekend, the Supreme Court temporarily halted a key pillar of the administration’s deportation push, setting up a possible showdown between the justices and Trump. At the same time, the White House is mulling options for firing Jerome Powell.
As if this situation needed to get any more acute, a draft executive order which Trump could sign as soon as this week would gut the State Department and require new diplomats to pass an “exam,” a key element of which is a test of candidates’ “alignment with the president’s foreign policy vision,” which is to say a loyalty test.
The details of the order, and a pair of sister documents one of which calls for a 50% cut to State’s budget, are barking mad — bonkers, if readers will forgive the lapse into colloquialisms. Marco Rubio, who called the original New York Times report on the shakeup “fake news,” only to see it re-reported by other outlets who were shown the same drafts and memos, is well and truly lost to us. You can’t trust anything he says about anything.
So, that’s the backdrop for the IMF meetings which, frankly, I’m surprised Trump didn’t try to cancel. The Fund’s new economic outlook will “include notable markdowns,” Kristalina Georgieva said last week, although they won’t forecast a recession. Inflation projections, Georgieva went on, will be marked up “for some countries,” and the outlook will “caution that protracted high uncertainty raises the risk of financial-market stress.”
Suffice to say nearly everyone in town for the proceedings is an unwelcome guest in Trump’s eyes, and you can be sure he’ll endeavor to make the situation even more awkward than it’ll be already with inflammatory social media posts, and pronouncements of various sorts. If he does unveil a State Department remake while the IMF and World Bank are in town, the symbolism won’t be lost on foreign dignitaries.
At this point, markets are entirely beholden to Trump. As one CIO told Bloomberg, “This is just one guy controlling trillions and trillions and trillions of dollars. We have never really seen anything to this extent — ever.” That same assessment applies to Trump’s tightening grip on American society and global affairs more generally. It’s unprecedented in modernity.
I think it’s clear now, just three months into Trump’s second term, that impeachment is an existential imperative. Of course, that’s impossible because no Republican would risk such a maneuver, which is itself tragic because as bad as things are, we’re still in Hans Christian Andersen territory. The emperor has no clothes. As far as we know, he has no means by which to remain in office if impeached in the House and tossed out by the Senate.
In simple terms: Trump still hasn’t demonstrated the willingness nor the capacity for domestic political murder. You need that if you’re going to establish yourself as a real dictator. Republicans could end this nightmare if they wanted to. If not, and it goes on for another six or 12 months… well, there’s no telling what Trump will demonstrate.
The economic data docket’s fairly sparse in the US this week, and much as this pains me to say, I think we’re seeing the last of the unaltered government macro figures. It seems very unlikely that Trump and Howard Lutnick will sit idly by while “deep state” statisticians document America’s descent into a stagflationary recession. While it’ll probably take them a while — several quarters, I suppose — to master the dark art of data massaging, I’d expect the numbers to stop lining up with private sector indicators come Q3 or Q4, particularly if the economy takes a turn for the worse.
Consider this: If Trump’s going to mandate a de facto loyalty test for the State Department, as detailed in Rubio’s “fake news” EO seen by (read: leaked to) multiple mainstream media outlets, you’d be naive to think government statisticians won’t labor under some manner of fealty mandate in the very near future.
In any case, preliminary reads on S&P Global’s PMIs for the US are due Wednesday along with the government’s new home sales tally for March, the NAR’s existing home sales update will be released on Thursday and the final read on University of Michigan sentiment for April’s on deck Friday. A procession of Fed officials will speak, including Jefferson and Waller.
It’s bad. It will get worse.
You think he’s got it in him? I got the idea previously that he is too much of a wimp, in your opinion.
I mean, he is immune.
I think Trump is himself on a personal journey, to a place where such things will be doable and deniable.
What’s left to constrain him. We’re not sure that if SCOTUS decides against him he won’t ignore it, then what. At this point it doesn’t look like the Republicans will stand against him for fear of his wrath, political and maybe more. That leaves the markets. Trump is guided by revenge and money and the markets speak to the latter. Looks like american democracy is being held together at the moment by a thin string of capital. The next test of Trump’s power is the fight being led by major universities, can they succeed where some of the biggest law firms folded. Looks like turbulence rules the days ahead with no ports guaranteeing safety.
Hitler didn’t personally kill anyone. Plenty of people were willing to do it in his name though. Trump has been looking for those types for a while now.
Hitler was an ideological lunatic. The best explanation for his self-destructive acts is he drank his own kool-aid and believed in his own ideology. Trump is a grifter. Political murder is a big risk and could cost him everything. He is already at the top and free to grift as much as he wants. Does he have it in him to go further? If the H thinks he does then it’s worth taking seriously. I was thinking about investing in funeral services sector anyway so that still seems good.
Let’s hope that he is deposed. And when he is then by that time you have new limits on presidential power or get someone reasonable because a progressive president using all these levers of power could be less than great as well.
Perhaps I missed it, but I was wondering when someone would openly speak of the impending (if not current), “dark art of data massaging”.
So how far will Jamie, Larry F., etal. go to suppress their economists, quants and analysts from publishing analysis contrary to the new 2025 “dark state”?
This is how far – the 2020 election was stolen. After that your masses will believe anything.
The only way this ends well for America is if somebody (perhaps the “deep state”?) removes him from power. It’s that simple. And the stakes are that high. I understand that risks making him a martyr of some sort, but these Trump “loyalists”, much like Trump himself, don’t actually believe anything they say about him or his “greatness”. To them he’s just a meal ticket to short-term personal financial gain. They’ll find another grift to latch on to in short order.
There is no replacing Trump. That’s by design, his ego can’t handle someone who actually threatens him. If he’s removed, the void in the GOP will collapse in on itself.
We should be so lucky. GOP needs a CTRL+ALT+DEL at this point.
I had hoped that the comments from Senator Lisa Murkowski would be the beginning of a “me too” movement for the elected Republicans. One foot in the doorway leading back to checks and balances.
We could hope, but we’ve seen what has happened to Liz Cheney, Adam Kinzinger et Al…
I bet Susan Collins is “concerned”
Many people that I know are afraid to make any public comments regarding the seriousness of this situation for fear of identification and retaliation against themselves or a family member. This is not the country that I grew up and used to live in.
If things go where we fear they really might go, the only (eventually) effective response would be from the streets. Or as John Locke euphemistically put it, “an appeal to heaven”. Let’s hope it doesn’t come to that. I am for the first time in my life taking a position in Swiss Francs.
I feel I’m in a plane, the pilot has announced that we are going to crash, the plane has started its descent. It’s accelerating and the noise is deafening and people are beginning to scream.
All this in three months. Shocking, really, truly shocking.
The unintended consequences are mind boggling, interesting times.
Not sure they are unintended
When China stops buying US beef, soybeans, Boeing jets, etc. , some of the trump voters will start screaming. Trump will blame ??, but seeds are planted.