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  • In 1971, US President Nixon imposed a trade tax on imports into the US, and froze US wages and prices. This was not a success. Faced with rising costs and no ability to adjust pricing, businesses stopped supplying goods. Controls collapsed, and inflation soared. Overnight media reports suggest US President Trump has told US auto companies not to raise prices in the wake of aggressive taxes on imported autos and parts.
  • The US inflation measure, the PCE deflator, is published, alongside income and spending numbers. The main inflation impact of Trump’s taxes will be felt in second-round effects (US companies raising prices under cover of tariffs, or retailers’ profit-led inflation). The details of the deflator will be important to monitor.
  • Final US March Michigan consumer sentiment and inflation expectation data is as flawed as all sentiment surveys are. However, any signs of weaker sentiment or higher inflation expectations from Republicans might be a useful signal, suggesting economic reality is penetrating partisan media bubbles.
  • UK GDP revisions and February retail sales data both signaled more economic strength than had been expected. France and Spain offer preliminary March consumer price inflation numbers—neither is expected to worry the ECB, and of course before the consequences of any retaliatory trade tariffs.
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