For now, the entry of people into the workforce and wage gains will provide a cushion for the economy as it adjusts to the new realities of higher taxes on imported goods. … READ MORE >
Joseph Brusuelas
Market minute: U.S. effective tariff rate hits 23%, creating conditions for downturn
The effective tariff rate in the United States now stands at 23% following Wednesday’s announcements of new tariffs, with the trade-weighted average mean currently resting at 18%. … READ MORE >
Market Minute: Ending the American put on the global economy
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 >