As the reality of what may be up to a 20% increase in taxes on imports sets in, global production and consumption will fall back as will imports into the U.S. … READ MORE >
Market Minute: Remittances to Mexico from the U.S.
The economic interdependence between the U.S. and Mexico is significant and unwinding it will be painful on both sides of the border. … READ MORE >
Trade war turning FX traders bearish on the dollar
Currency trader positioning is turning bearish on the dollar and becoming more bullish on the currencies of major U.S. trading partners as the U.S. prepares to launch a multinational trade war. … READ MORE >
Financial conditions turn negative amid risks of trade war
Given the ever-widening scope of U.S. tariffs, with the next round set to take effect on April 2, the risks to the economic outlook through the financial channel are elevated and rising. … READ MORE >
U.S. households pull forward spending as PCE inflation remains sticky
Households are preparing for what they believe will be another price shock caused by an increase in the costs of goods through a policy-induced trade shock. … READ MORE >
Market Minute: FX volatility dampening dollar valuation vs. peso and rupee
A Black-Scholes model of one-month at-the-money implied volatility options against the Mexican peso and Indian rupee suggests that investors are expecting a last-minute deal that would lower the impact of the tariffs. … READ MORE >
Market minute: The dollar’s role as a reserve currency does not lead to overvaluation
If policies are adopted to devalue the dollar and end its reserve status, they would only damage American businesses and consumers. … READ MORE >
Market minute: The Dirty 15, or those economies likely to be targeted with selected tariffs
From our point of view, the current global trade framework favors the U.S. for the most part. … READ MORE >
Market minute: Identifying the signal from the noise in consumer spending
Producers and consumers have pulled forward economic activity to avoid potential tariffs, which has skewed hard data and dampened soft sentiment data. … READ MORE >
Market minute: Widening credit spreads denote rising risk from trade policy
Wider spreads are often a harbinger of reduced access to capital, rising unemployment and declining corporate capital expenditures. … READ MORE >