First, the supreme court collapsed the Trump administration's tariff wall.
Then the Trump erected a temporary tariff fence, due to fall down again in late July.
Last night USTR shared how it plans to rebuild the tariff wall's foundations. ����
I'd watch for seasonal adjustment issues in transportation, airfares, package holidays and other energy-impacted HICP items in the final releases. But a lot of the damage will be done anyway.
🇪🇺 A very bad inflation report for the ECB, including a 50bp rise in services inflation that looks at odds with national data, way above staff projections.
Likely to be reversed, but this will keep the ECB on high alert following an all-but-certain rate hike next week.
CHART OF THE DAY: On Apr 16, the IEA made a headline-grabbing warning: Europe had "maybe 6 weeks or so of jet fuel left." It's week seven; the planes are still flying. Since those headlines, European wholesale jet fuel prices have fallen ~30% to a ~3-month low.
🇪🇺 Olli Rehn is basically giving up to the idea that the ECB "needs to hike" to "preserve credibility". The bond market is doing part of the heavy lifting for the central bank, but it’s also forcing their hand because they worry the sell-off will worsen if they don’t hike.
🇪🇺 French PMIs registered one of the largest drops in output and employment outside covid and the sovereign debt crisis. Inflationary pressures are rising and tighter financial conditions will only make things worse.
Germany is the epicentre of the China Shock 2.0 reverberating in global markets
In a new paper, @Brad_Setser and I show the shock is a key driver of Germany’s economic malaise. And it's accelerating
Berlin needs to stop admiring the problem, and join efforts to fight back
1/
New today on Stripe Economics: four of my favorite Sessions-related chart from this year.
Solopreneurs are multiplying. The SaaSpocalypse wasn't about current activity. And the Solow paradox suggests AI productivity gains may be ahead of us, not behind. /1
https://t.co/y71yZDuK6s
Also, we live in a different world from when Warsh was nominated. Will he still push for cuts coming into the job, or will his main challenge be to convince the FOMC *not to hike*?
Breaking: the Austrian Governor is NOT as hawkish as some of his ECB colleagues.
*ECB'S KOCHER: WE'RE NOT CURRENTLY CLOSE TO ADVERSE SCENARIO
*ECB'S KOCHER: JUNE IS DECISION BETWEEN HIKE AND HOLD
Markets still pricing in 21bp for June, and 75bp by year-end.
🇪🇺 Latest update to the ECB's wage tracker has remained broadly stable around levels consistent with price stability, and showing no signs of second-round effects. https://t.co/lReQ51MJvs