Daily update
Daily update
- The Federal Reserve minutes suggested some members felt that relentlessly hiking rates—without ever pausing to understand the consequences—might not be the best possible strategy. Fed Chair Powell’s maniacal chant on “hike, hike, hike” drowned out such rational ideas. Reports of the minutes have stressed the staff economists’ “mild recession” view. “Mild recession” is not really defined.
- China’s March export data was unusually strong, while imports kept falling. Notoriously, global trade does not add up (the world imports more than it exports), but this export strength is not generally evident in other economies’ import data. China’s central government recently emphasized the importance of export growth, which may have changed local officials’ priorities. Investors should be cautious in interpreting what this data signals about global consumer demand.
- US March producer price data are expected to be benign. Commodity prices matter more to producer than to consumer prices, and the fiction of Owners’ Equivalent Rent is not part of this data. Profit-led inflation is something that is occurring more towards the end of supply chains, and is less represented in producer prices.
- There are more central bank speakers scheduled. IMF meetings tend to encourage central bankers to emerge, blinking, into the daylight—and then they feel the urge to say something.
