Daily update
Daily update
- Media reports suggest US President Biden plans to announce new taxes on US consumers of products from China, specifically, electric vehicles and solar products. These taxes are not as broad as the consumer taxes imposed by US President Trump, but they are reflective of the trends of scapegoat economics and prejudice politics. Economic nationalism is a specific manifestation of those trends.
- US May Michigan consumer sentiment reminds investors why sentiment polls should not be trusted —the gulf between registered Democrats’ and registered Republicans’ views highlights the problems of surveying a polarized society. Inflation expectations will only reflect current food prices (falling in a third of cities) and fuel prices (generally rising). Inflation expectations do not matter much (economically) if people do not act on those expectations.
- UK GDP was somewhat stronger than expected in the first quarter—construction was the only real drag on activity (it did rain quite a lot). The negative growth at the end of 2023 has not yet been revised away, but revisions take several years to work through.
- The Bank of England is moving slowly toward joining the policy-easing party. There was another vote for a cut now, and Governor Bailey effectively signalled that rate cuts are coming this summer.
