Daily update
Daily update
- US President Biden called China “xenophobic” in comments highlighting China’s structural economic challenges. Biden also pledged higher taxes on US consumers of China’s steel and aluminum. US Congress lives in terror that China will learn the “Texas hold‘em” TikTok dance before Speaker Johnson has mastered the moves, and is proposing to tie a TikTok ban to aid measures for Ukraine and Israel.
- The world is undergoing significant structural change. Fear of change, with loss of income and social status, encourages people to look for scapegoats. The political response to this is often prejudice politics, and (when foreigners are the scapegoats) economic nationalism. This is a global trend, and economically destructive. Success in the coming decades depends on having the right person in the right job at the right time. Prejudice and economic nationalism stand in the way of that.
- Bank of England governor Bailey noted that UK inflation will drop sharply next month (everyone knows this already). Federal Reserve speakers are the main feature today.
- The Fed’s Beige Book of anecdote strongly suggested profit-led inflation is retreating as consumers rebel. However, benign inflation anecdotes do not automatically translate into lower headline inflation—it is administered and made-up prices that are propping up inflation, not market-determined prices.
