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 >
Economics
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 >
Trade deficit remains elevated, clouding first-quarter outlook
The data on goods trade for February suggested that the widening goods trade deficit because of tariffs was not a one-off. … 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 >
Business spending on durable equipment slowed in February
New orders for core business capital goods, which is a proxy for private investment spending on goods that typically last more than three years, fell by 0.3% in February. … 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 >
Consumer confidence slumps amid tariffs and layoffs
The headline index for consumer confidence dropped to 92.9, slightly below our forecast of 93.3, the Conference Board reported on Tuesday. … 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 >