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Tag: tariffs

Gold Rockets Ahead of China’s Economic Data as Beijing Slashes Yuan Peg, Outpacing Tariff Concerns
Gold Goes on a Winning Streak as China Opens the Market

In the run‑up to tonight’s much‑anticipated economic reveal from Beijing, the financial spotlight was on bricks of shiny gold. The gold market hit a sweet spot for the third consecutive day during the China open, sending investors across the board a little dose of pure optimism.

Why the Gold Is in the Driver’s Seat
- Stable Demand: Global traders see gold as a safe haven when uncertainty is high.
- Low Interest Rates: With yields on traditional bonds staying low, gold becomes a more attractive option.
- Currency Movements: Fluctuations in the yuan give gold a chance to sparkle brighter.
The Market Pulse

Gold prices keep your fingers trembling and your wallets itching for that next hint of brilliance. Investors have been dancing to a simple rhythm: buy more, hold tighter, and hope for more. And right now, that rhythm is hitting the high notes.

What’s Next?

Beijing’s upcoming policy statements may shift the gold wave, but for today, the market is treating investors like guests at a sizzling bash. Whether you care about the economy or just want to see your coins sparkle, tonight’s opening session sets the stage for both excitement and a touch of golden intrigue.

Yuan’s New Low: PBOC’s Latest Fix Leaves Investors Talking

Yesterday’s currency fix had the market buzzing. The People’s Bank of China (PBOC) nudged the Chinese yuan’s reference rate to 7.2133 per dollar, dipping down even further than the 7.2096 mark it carried over the weekend. It’s the weakest rate since September 2023 – a slow march toward the record low we’ve been eyeing.

Why the Fix Matters
- Currency Sentiment: Every time the yuan slides, it feels like a tiny boat wobbling on the waves of global trade.
- Market Confidence: A lower rate can shake up investor confidence, especially those eyeing China’s economic roadmap.
- Export Competitiveness: A cheaper yuan makes Chinese goods cheaper abroad, potentially boosting export sales.
The GDP Preview: What’s In the Numbering

We’re about to roll out China’s GDP data for the birth month of this year. Meanwhile, the statistics bureau’s March releases gave us a sneak peek.

Home Prices: The You-know-Who’s Numbers

In March, prices for new homes dipped just 0.08% month‑on‑month. Meanwhile, existing homes slid a bit harder, down 0.23%. Looks like the price drop is slowing – maybe the market is getting a breather or just making sure buyers don’t miss out.

Investors’ Takeaway
- New homes are still holding their ground a fraction more than last month – a small sigh of relief for builders.
- Existing homes? The chuckle‑mile reduction signals steady demand, albeit softened.
- Combined, the numbers hint that the real estate market’s nightmare of falling prices may be on a one‑way ticket to a more balanced ride.
Bottom line: The yuan’s tug-of-war continues, but the real estate houses seem to be taking it in stride. Stay tuned, because next week’s GDP will reveal if China’s economy is sprinting, strolling, or taking its sweet time.

China’s GDP Growth Cuts Through the Tariff‑Tide

When you’re watching the heatwave of tariffs lick the borders, you’d expect the economy to slow down a bit – especially with March’s uneven numbers. But China surprised everyone by jacking up its GDP by a solid 5.4%, beating the 5.2% forecast and proving that growth still has a few tricks up its sleeve.

Why the numbers matter
- 5.4% GDP growth – the headline that keeps economists and investors on their toes.
- Against a backdrop of 10% tariffs on raw China imports (thanks, Trump), the surge shows resilience.
- Accurate forecasting would have predicted a slowdown, but the market says otherwise.
Three Things You’ll Notice
1. The data came in pre‑Liberation Day, a key period that can tip the trend upside or downside.
2. Manufacturing kept its hype alive, feeding consumer demand and export orders.
3. Fiscal stimulus and tech investments are still paying off, clawing back any distortions from trade wars.
What this means for the global scene
- Supply chains get a little more reassuring – China’s output is steady, not flailing.
- Investors will keep a close eye on how tariffs might wrap themselves around next quarter’s data.
- It suggests that the “global slowdown” narrative isn’t as silver‑lining as some thought.
Bottom line

In a world where trade wars are the new normal, China’s 5.4% GDP growth whispers a simple message: Even with tariffs hawking overhead, the economy can still push forward. So, grab that coffee and keep your eyes on the reports – the numbers keep rolling in, and who knows where the next wave will take us?

China’s Fiscal Feats: Growth Hits the Mark and Surplus Breaks the Bank

In a season of bumper headlines, China’s economic performance was not just “in line” with its Q4 growth punchline— it also smashed Beijing’s 2025 full‑year ambition. And that’s saying something big!

First‑Quarter Trade Swings: The Surplus Showdown
- Over $270 billion in trade surplus recorded in Q1.
- Just shy of last year’s record‑grabber from the final three months.
- Nearly 50% jump compared to the same period a year ago.
It’s like hearing that your favorite band ranked number one on the charts, except this time the numbers are less about an album and more about commodities, services, and a roaring market skyrocket.

The Record‑Breaking Surplus of 2023

Last year’s almost $1 trillion surplus wasn’t just a figure—it was a force multiplier that drove about one‑third of China’s overall growth. Think of it as the “big push” that propelled the economy forward. And the echo from that boost is still reverberating in Q4.

Why It Matters… and Why Everybody’s Happening a Bit Excited
- Smaller businesses got a chance to dip into a larger consumer market.
- Investment in high‑tech and green infrastructure got a boost.
- Every field, from niche startup gear to global supply chains, felt the ripple.
In short, China’s trade surplus isn’t just a statistic—it’s the economic equivalent of a massive confetti cannon, marking the continued ascent of the world’s second‑largest economy.

China’s Economic Pulse: A Quick Glance

China’s finance chiefs have set a 5 % growth target for the year—think of it as the big boss saying, “Let’s keep the economy humming.” To make that happen, they’re rolling out new stimulus measures and aiming for a record‑breaking budget deficit. Sounds bold, right?

Data Highlights (and Some Surprises)
- Retail Sales jumped +4.6 % year‑to‑date – beating the +4.3 % expectation and the prior +4.0 %. A win for consumer confidence.
- Industrial Production went +6.5 % – outpacing the forecasted +5.9 % and matching the prior +5.9 %. Production lines are humming!
- Fixed Asset Investment earned a solid +4.2 %, just 0.1 % higher than the anticipated +4.1 %.
- Property Investment stayed flat at -9.9 %, exactly where analysts predicted it would land.
- Unemployment fell slightly to 5.2 % – a small but meaningful dip from the expected 5.3 % and the prior 5.4 %.
Why the Beat?

It turns out that tariff “front‑running”—think of it as catching the wave before it hits—has kept those numbers looking sharp. As Michelle Lam, Greater China economist at Societe Generale, puts it:

“The most pleasant surprise is retail sales, which shows that consumption subsidies are working,” she says. “Industrial production was a beat but understandable after the strong export data. But that’s all in the past now.”

Bottom Line

All in all, China’s metrics are telling a story of resilience and a few unexpected wins. With 5 % growth aims and big‑time stimulus, it seems the country’s economic engine is fine‑tuned and ready for the next quarter—just as people say: “Keep the gears turning!”

China’s Energy Boom Meets a Trade‑Aged Thriller

Why Beijing’s Belt‑and‑Braces Approach Is Import‑Skeptic

China is the world’s largest grabber of oil, natural gas and coal. To keep the country from becoming a one‑stop shop for burning fuel, Beijing’s been nudging energy companies to crank up production, hoping to keep the country’s hundreds of millions of extra feet of in‑feed burning under its own roof.

One‑Month Spark – Output Gains
- Coal: +9.6%
- Natural gas: +5.0%
- Crude oil: +3.5%
Coal and oil were way better than analysts had pinned, giving the ministry a brief “cheerful grin” before they meet the real drama.

U.S. Tariffs Turn the Inevitable into a Bargain Discount

According to Bloomberg, the U.S. duties on Chinese shipments are high enough to scrub them out of the U.S. market. Markets like UBS have dwarfed China’s GDP projection to a meager 3.4%, and Goldman Sachs and Citigroup have all loosened the optimism band.

“We’re in a trade war where the U.S. can crush most exports, even with temporary exemptions,” said Bloomberg economists Chang Shu and David Qu. “We expect Beijing to roll out stimulus faster than a Netflix binge roller‑coaster.”

The NBS Sombre Forecast

The National Bureau of Statistics issued a sober reminder:
- External environment getting rougher.
- Domestic demand failing to ignite.
- Need for more macro‑policy hacking.
They basically told us: “Heads up, we’re not done building the rocket.”

Beijing’s 30‑Point “Spend‑It” Blueprint

To keep the consumer economy rock‑steady, top Communist Party bodies rolled out a 30‑point blueprint. The goal: make people feel like new shopping carts are [somewhere] between the valley of the apple and the tech stack of the capital. It’s a consumer‑stimulus play that’s half aggressive, half “just give us a bigger budget for the snack bar.”

Bottom Line: Energy, Trade, and a Beekeeper’s Mission

Energy firms are firing up the engines, but the U.S. tariff wall is roughly a brick wall with a moniker of “Shocking”… If you’re in the Chinese consumer market, the government’s 30‑point plan might be the best thing since hanging the CCTV in every bakery. The economics are as real as a broken phone charging cable – keep them plugged in, or the whole system will die.
2025-09-30
CPI Preview: Are Tariffs Finally Poised to Move Inflation?
The CPI Report That’s Gonna Be the Talk of Wall Street

Feels like we’re hitting the same old wall again: the tariffs from the past few months haven’t nudged prices up the way we hoped. But hey—this Wednesday’s CPI numbers are about to get a close look. Wall Street’s crystal ball is all set with a tidy little forecast.

What the Bells Are Ringing Out
- June’s CPI jump: Expect a tidy +0.3% month‑over‑month rise – that’s a nice bump from last month’s +0.1%.
- Core CPI is following the same play: Another +0.3% lift is on the cards for June, matching the core’s +0.1% in May.
Bottom line: banks are bracing themselves for a steady climb, and we’re ready to see if the tariffs finally do what they’re supposed to—push those prices a smidge higher.
2025-09-19
Ursula von der Leyen's return as China hawk shuts down talk of diplomatic reset
EU’s Cranky Commander‑in‑Chief Turns Diplomacy Into a Scrabble Game

Von der Leyen’s G7 Gaffe Leaves China in a Cervial Whisper

When Ursula von der Leyen swooped in during the G7 summit with a “bull‑horn” stance on China, the idea of a smooth EU‑China handshake turned into a wobbly dance routine. A few minutes of hawkish rhetoric had all the diplomats scrambling to find the right choreography.
- Hawk‑ish heels: If you’ve ever seen a bird look like it’s about to dive for an answer, that’s how the EU leader glared at China’s economic juggernaut.
- Reset? Reboot? Biceps‑on: The “reset” buzzword from last week suddenly feels more like a yawn—though the summit hinted at a future easier hand‑shake.
- China’s quiet exit: Beijing stayed fairly mum, but all signs point to a pause on comradely rail‑cars and shared R&D.
In short, the G7’s reality TV spectacle had more dramatic twists than a telenovela, turning the hope of fresh diplomatic starts into a village gossip with dubious outcomes. Will the EU muster the boldness to keep calm in the crossover? Time (and another summit) will tell.

G7 Summit: Brussels Gets a Dose of Diplomatic Heat

Picture this: the chill of summer in Brussels suddenly feels like a sudden blast of hot pepper. The old whisper of cozy talks with China turns into a full‑blown tongue‑in‑cheek roast.

Ursula Von der Leyen’s Bold Switch
- “China can’t play by the rules” – She shot right at Beijing’s “pattern of dominance, dependency and blackmail.”
- Protection vs. Poke‑non – While other nations open markets, China is looking to undercut IP rights and flood the world with government‑backed subsidies.
- WTO Woes – She says the biggest fumble in global trade was China jumping in mid‑2001. That move unleashed a tsunami of cheap exports, shaking jobs in the EU and the US.
“New China Shock” in the Making?

Von der Leyen’s warning feels like a fresh jolt: “The world is already feeling a shock; another one is coming.” The tone is all‑out, echoing her first‑term mantra of “de‑risking.” In short, she’s cutting the Red Sea with a gash and demanding a reshuffle of the game.

China’s Quick Comeback

Guo Jiakun, Beijing’s spokesperson, called her words “baseless” and “biased.” But held out a green cue.

“We’re ready to increase communication with the EU, handle trade differences fairly, and aim for win‑win prosperity.”

However, China’s firm stance: “No one can hurt China’s right to develop or seize our interests for personal gain.”

Bottom Line

It’s a classic case of a new hawk swooping in on a diplomatic skyline that’s already been tilting. Both sides display a mix of tension and offering a handshake, proving that the world isn’t quite ready for passive calm yet.

The reset that never was

China’s Sweet Talk: Turning Diplomacy Into a Charm Offensive

In the tangled web of global politics, Beijing is putting on its best smile to smooth over the rashes caused by the U.S. heat‑stroke of tariffs. Diplomats proudly coin it a “charm offensive,” a slick way of saying China wants to put a friendly hand on Europe’s shoulders while keeping its own eyes on the prize.

Which Way to Go?

When that Western alliance started looking like an impending domino cascade, China rolled out the red carpet:
- Scrapped some sharp‑edge sanctions on parliamentarians.
- Set the stage for an ultra‑high‑stakes EU‑China summit in late July.
- Sent a polite nudge that says, “Hey, we’re on your team.”
50 Years of Hand‑shaking

Just last month, Xi Jinping celebrated the half‑century of ties with a big‑friendly grin, declaring it the perfect moment to “open up a brighter future.” He was all about fashioning good vibes and warm hand‑shakes.

Von der Leyen’s Sparkling Response

When inquired, she shot back with the vibe of a weather‑forecast anchor: “We’re committed to deepening, balancing, and reciprocity‑darting with China.” Her words were all sunshine and rainbows—until the G7 stage crossed the stage.

G7, G7, G7: Who’s On the Ticket?

There, in front of a crowd that included Trump, the vibe suddenly got a wild twist. We’re talking the hawks crackling for free, the espresso shot of “weaponising” trade, all thanks to Beijing’s new play: curbing the roughly 60% of rare‑earth supplies it owns.

China sits on a near‑monopoly over the 17 metallices that power gadgets from Tesla’s car to iPhone’s display. It controls 90% of the turning, polishing and polishing the metals that bring the high tech world around the globe.

Even If the Restrictions Relieved a Bit…

Von der Leyen whispered behind her head that the threat is still hanging around like a ghost in the basement. She asked the G7 to pull together more tightly and put extra pressure on Beijing, in case the weak-flipping Tobacco is an un-Lon Expo. She was all the same about the urgent action needed.

The Bottom Line

China’s feistening charm affair shows how they can put their diplomatic endeavor in front of Europe’s eyes, while the G7 moves to close the gap: one long‐handed diplomacy, one roaring discussion.

Ursula von der Leyen Hits the G7 in Canada

Picture this: the EU’s top brass swoops into the Hockey‑Rink of international politics for a G7 summit, waving not just iced coffee but a full‑blown agenda of frictions with China.

What’s the Real Drama?
- Rare earths – the hot potato that got the EU to put a “frown” on China’s electric‑vehicle market.
- EV duties – steep tariffs that’ve turned Chinese cars into pricey toys for Europeans.
- Medical device door‑shut – Chinese firms suddenly banned from public tenders.
- 5G “High‑Risk” label – Huawei and ZTE flagged as potential national security hazards.
- Sub‑sidiary snooping – investigations into suspicious government subsidies.
Beyond the Numbers: Beijing’s Playbook
- Foreign Info Manipulation & Interference (FIMI) – Brussels claims China’s brain‑wave hacks are a national security nightmare.
- Hacking Hits – state agencies allegedly under cyber attack.
- Taiwan Tension Pump – China allegedly inflames military tensions in the Strait.
- Human Rights Hotfix – accusations over Uyghur treatment.
- Russia’s Ally – Beijing’s “key enabler” of Russia’s invasion of Ukraine.
Xi Jinping’s Non‑Stop “No‑Limits” Bargaining

Even as European voices shout “Screw it, let’s choose a different road!”, Xi stayed the course: no back‑down, no cozying up to the V‑ship that’s been swinging at everyone’s door.

No Winners? A Missed Opportunity

Noah Barkin, a senior fellow at the German Marshall Fund, points out the missed chance that could have come from a girl‑boss moment in Brussels. He’s as blunt as ever:

“Von der Leyen’s sharp jab at China is a direct knock-down of Beijing’s stubbornness. If China doesn’t show the will to tackle Europe’s worries, July’s summit will be about as useful as a pizza in a war zone,” Barkin says.

What’s Future Looking Like?

He predicts a growing wedge:
- US market losing Chinese goods, throwing a new one‑in‑a‑apartment of commerce at Europe.
- China’s support for Russia becoming the Kremlin’s “inner sanctum” for Europe.
- European industries start feeling the pressure from a reshaped world‑trade map.
Bottom line: the G7 summit’s call‑out was real, the climate of tension remains hotter than a sauna, and if China wants a real deal, it’s supposed to get back on the school bus that’s headed to Brussels.

Keeping it real

Spain’s Beijing Visit Spotlight Flashes Hope Of an EU‑China Reboot (But Reality Stays Hard‑Edged)

The EU’s chief orchestrator, Ursula von der Leyen, has long championed a no‑frills, realistic view on EU‑China ties. Yet that approach hasn’t automatically won over every European member. A recent trip by Spain’s Prime Minister Pedro Sánchez to Beijing added a fresh splash to the debate.

What Was Said (and Why It Counted)

When Sánchez met President Xi, he pressed for a move past the obvious ‘confrontational’ feel‑good angle. His main points: balance over beef‑up, negotiated fixes for differences that already loom, and deepening cooperation in shared interest zones. It sounded diplomatic, even optimistic – a note that stirred the Brussels gossip mill.

Spin Team Heaps on Reset Rumors

Brussels loved the talk, and whispers about an “EU‑China reset” went from quiet to loud. But experts are not buying it as a full‑blown blueprint.
- “Reset hype is more hype than help,” says Alicja Bachulska, a policy fellow at the European Council on Foreign Relations (ECFR).
- She points out that the Commission’s stance is “curiously consistent” – it sees China as both a threat and a limited partnership, stepping on the same dish
- In short, the Commission won’t waver on its current assessment, even if some voices want a softer touch.
The Bottom Line

While Sánchez’s words lit a spark in Brussels, realpolitik says that the EU’s approach to China remains steady. The idea of a wholesale reset is intriguing, yet realistic checks keep the plan greased with cautious optimism rather than concrete action.

Ursula von der Leyen will take in an EU-China summit in July.
Ludovic Marin/AP

Politics, of course, come with economics attached.
For many countries, particularly those export-oriented, China remains an extraordinarily valuable market of 1.4 billion people, despite the multiple obstacles and hurdles that European companies face when doing business. With Trump threatening a whopping 50% tariff on the bloc if trade talks fail, having a cushion to fall onto is considered indispensable to avoid – or at least mitigate – the potential ravaging impact.
Trade will be at the very top of the agenda at the EU-China summit, with both sides looking forward to having something to announce. Brussels is keen to put an end to China’s probes into brandy, pork and dairy products, which it considers unjustified.
But as the date nears, hopes for a trade breakthrough that can make a tangible difference on the ground and relieve some of the tensions are fading, as von der Leyen’s hardened tone at the G7 demonstrated.
“It’s about being realistic: we still see China as a partner, competitor and rival,” a senior diplomat said, speaking on condition of anonymity. “We have to be perhaps more confident about our interests, what we can do to pursue them better, but also act when actions are taken that threaten the stability of our continent.”
A diplomat from another country kept a cool head to lower expectations ahead of the summit, arguing China’s alliance with Russia and campaigns of foreign interference remain “serious” and “disturbing” factors with no sign of improvement.
“If you want to really deepen ties with us, that’s impossible if, at the same time, you behave like this,” the diplomat said.
“The EU needs to stand up for its own interests, no matter who’s in the White House.”
2025-09-15
Morgan Stanley Warns: Trade War Triggers Significant China Slowdown
What a Week! (And Why Tariffs Still Bother Us)

March 2023: The Tariff Rollercoaster

Picture this: you’re juggling a stack of spreadsheets, sipping your coffee, when suddenly the government decides to hit pause on the U.S.–China tariff drama. Sounds like a vacation, right? Nope—it’s an even heavier ego‑boost for uncertainty.

Why It’s a Big Deal for the Macro World
- Corporate Confidence on the Line: Every CEO now wonders whether it’s wise to invest in new machinery or open a factory abroad.
- Capex Cool‑Down: Think of it as a financial deflation—spending on capital projects slows, and that can drag GDP down.
- Trade Tumble: Less import and export means fewer business deals, fewer jobs, more patience for everyone.
The Lessons from 2018‑19

Back then, the world ran full‑speed on tariffs. Lesson learned? The slowdown in capex and trade was the main culprit behind the dip in global growth—exactly what we see today.

Turning the Tide: Lower Tariffs, Higher Peace

What if we slash those tariffs, especially when it comes to China? A big win. But the U.S. administration isn’t just about numbers; it’s on a mission:
- Cut the Trade Deficit: Pull the trade balance back into the green.
- Bring Production Back Home: A push for domestic manufacturing that, if successful, could tackle both issues.
In short, less uncertainty equals a brighter outlook. The real challenge? Negotiating deals without compromising on the core objectives.

Bottom Line

Uncertainty now is like a loaded gun in the economy’s room. When we lower tariffs and shift production in the right direction, we’re likely to set the stage for steady growth and better trade relations. The next chapters of this story? Let’s hope they’re written in an all‑green, less-tension style!
2025-09-09
Is A Second Wave Of Inflation Coming?

Authored by Jeffrey A. Tucker via The Epoch Times (emphasis ours),

Commentary

The Trump administration has been urging a cut in interest rates. The reasons are obvious. This would make home loans more affordable, reduce pressure on government interest payments, and spur business investment.

But there is a genuine downside that should also be considered. Lower rates also risk fanning the flames of inflation. Even now, the devastation from the last five years is very obvious to all. And it’s hardly gone: the CPI came in fairly hot last week.

In three to four years, the prices of everything have shot up. You know the story with housing prices: double in many places. You feel it every time you go to the grocery store. Meat has again taken an upturn. Groceries in general are up nearly 40 percent in these strange years. They are not going back either. We are stuck and the American household is squeezed as never before.

Groceries are particularly painful because you feel it every day.

Wholesale prices reflected in the Producer Price Index (PPI) have shown new energy too. That’s particularly unsettling because it foreshadows new price pressure on the consumer side too.

The PPI came in at an intolerable 3.3 percent. That’s not entirely attributable to tariffs. In fact, all evidence points to the ways importers are eating the tariffs themselves via lower profit margins but this is not yet being passed on to consumers. The price energy on the wholesale side seems to have monetary origins.

David Stockman comments: “The wholesale price index excluding food and energy has risen by a fulsome 33.3 percent since January 2017 when the Trump Era began. That is, for the past eight and one-half years the basic wholesale price index has been climbing relentlessly higher at a 3.4 percent annual rate. Do that for two decades and a dollar earned or saved today will buy exactly 51 cents.”

Other indexes confirm some upward inflation pressure. The Truflation index has been the most credible of the last five years. It is also showing upward movement in consumer goods and services. It’s not over 2 percent in general but it is far higher than its low from January and February.

It’s a good time to check in on the main monetary aggregate, which is M2 (the Fed broke M1 back in 2020 for unknown reasons). This is the number to watch to see future price trends. The COVID period saw the biggest increases on record combined with zero interest rates. The Fed then vacuumed much of the excess out of the system. But those efforts then stopped before the 2024 election. The monetary aggregate now stands where it was at its peak.

That said, we have seen an upward trend in the rate of money creation. It is now trending toward 5 percent, which is very high and risky. This is without rate cuts. With more rate cuts, the trends would accelerate.

None of these numbers bode well for avoiding the worst fear of economists. The concern traces to the famous three waves of inflation from the 1970s. It kicked off, pulled back, came back higher and pulled back, and then the third wave hit with a ferocity that no one saw coming.

Anyone who lived through it will never forget. It came about following the end of the gold standard. The experts predicted the best monetary system ever. Once again, the experts were wrong. Then they blamed the American people for consuming too much.

Government was reduced to distributing WIN buttons: Whip Inflation Now.

None of this three-wave pattern was intentional. It traces to the arrogance of the central bankers in thinking that they had conquered the previous inflation. Once they believed the coast was clear, they lowered rates and pursued a looser policy. They could not control the machinery the way they believed and their actions kicked off a second wave.

One might suppose that would be enough to prevent yet another reckless cut but nope. They did it anyway. That’s when inflation hit double digits, gutted the U.S. capital stock, bankrupted households, and forced millions of young mothers into the workforce just to pay the bills. The finances of the American household never really recovered from this disaster.

We simply cannot afford to risk this yet again. Trump certainly does not want this on his watch. Another round of inflation would discredit the whole of his second term. It would likely be blamed on tariffs. This is the risk. One hopes that he does not get his wish of a Fed rate cut. Nothing could be worse for his presidency.

In this way, Jerome Powell is correct to resist the calls for a rate cut. He is not being ornery. He is the rare case of a responsible central banker, at least for now. The worry is that his replacement will have one job only and that is to lower rates further. Keep in mind that in real terms, short-term rates are not actually high right now once you consider inflation.

Monetary policy in general is an insidious influence over U.S. politics. Every new president wants lower rates in order to generate the appearance of higher growth. Also, lower rates reduce pressure to cut the budget because they cause the servicing of the debt to fall on the margin, thus freeing revenue for other forms of expenditures.

That said, there are always consequences to artificially low rates. They distort production structures toward capital goods industry, blow up housing prices with new demand, and further financialize an already highly leveraged financial industry. They also create the condition for more inflation down the line. It could be a year or two but it will eventually come.

This is the danger. The Trump administration needs to put a priority on killing inflation. The rumors of its death were greatly exaggerated, and the price pressure is already clawing its way out of the coffin and through the dirt. Beware! This is no time to lower rates. It’s in the long-term political interest of the Trump administration to generate economic growth the old-fashioned way: through saving and investment, not fiat money.

The second wave is not here yet. But there are already reasons to be on the lookout.

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2025-08-28
Skip Today – Grab Tomorrow
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Can We Just Skip to Next Week?

What the Market’s Boring? A Behind‑the‑Scenes Look

Last week felt like a yawning stretch for Wall Street. Despite headlines screaming about the Fed’s future, banks kicking off earnings season, and AI/Data Center/Chip firms topping the positive chart, every index stayed almost flat. The Dow and Russell 2000 barely moved, the S&P gained a half‑point, and the Nasdaq 100 actually managed a quiet 1% uptick.

Yield Curves & Federal Open Market

Even with all the FOMC chatter, the 2‑year bond dipped less than 2 basis points and the 10‑year hovered just a beat higher. Not much reaction—just the kind of muted backlash we see when markets shrug off a single press statement.

Expect More “Out‑of‑the‑Box” Fed Stuff

We’ve been hinting that the next few weeks might bring some wild Fed concepts—think yield‑curve control, or other “extraordinary” measures recommended to the Fed, not by the Fed. If the administration starts pushing these ideas, it will definitely shake up the narrative.

Keeping the Report Lean & Clean

The T‑Report team is scattered across the country, so we’re tightening the analysis. Data flows are smooth, allowing us to stay compact while still keeping an eye on earnings surprises or odd headlines. The market’s treating everything as expected lately, but there’s still a chance something shifts gears.

What’s on the Radar This Week
- U.S. Treasury Deposits Customs & Optional Excise Taxes: last month’s “big day” saw a $20 billion haul. Will this month’s tide be higher or lower? We’ll see.
- Budget Surplus in June: while one‑time tweaks helped smooth the fiscal picture, tariff revenue remains a solid punch in the wallet.
- Job Data: last month was surprisingly strong, largely due to seasonal lifts in government hiring. Will the trend keep trucking? Forecast? Hard to say.
- Powell Press Conference: the actual FOMC decision will be there, but the key is the melodrama—and hopefully some enlightening insight.
- August 1st Tariff Deadline: talk of an actual cutoff is a bit fanciful. Yet if tariffs stay stubbornly high, markets might start to nervous, unless clear signs of an extension appear.
Sector‑and‑Company Play

We’re staying lean in on companies that thrive under deregulation, especially those pushing the U.S. back toward national production for national security. That’s the sweet spot for the next round of upgrades.

Why the Week After Next Seems More Juicy

Expect a real “exciting” spread in the market one week from now. The next week is probably going to be more of a snooze, but the following week might deliver that electrifying buzz everyone’s craving.

Disruption

Last Week’s Highlights

Disruption (ARKK) Packs a Punch

ARKK, the proxy for “disruption,” finished the week up 7%—not a small bump for a volatile market. Over the month it’s already climbed 16%, and the first three months show an eye‑popping 72% rise. It’s a good reminder that the trend isn’t just a fluke.

Crypto’s Flavor of the Month

The surge is no coincidence: the crypto space had another winning week, buoyed by the new “Genius Act” hitting the books. While other administrations might pause their crypto playbook after this law, the current revival is likely to push the U.S. into the lead, especially with the focus on USD‑based stablecoins.

Bitcoin Keeps Its Cool

Bitcoin ended the week almost flat—yet it maintains a 10% month‑over‑month gain. It’s a steady rock in a sea of rollercoasters.

Altcoins Take the Spotlight
- Ethereum exploded by almost 20% in a single week. As the legal landscape shifts, ETH is poised to become even more integral to the crypto ecosystem.
- NEW: The ETHA ETF (an Ethereum exchange‑traded fund) has doubled its shares outstanding since late May, highlighting growing investor appetite.
The Staking Shortfall

Those Ethereum‑focused ETFs are a bit of a sour note — they’re missing out on staking rewards, which means investors only see price swings, not the full earnings potential. That’s a call for more inventive products that let investors tap into Ethereum’s total return, not just its market moves.

Beyond the Token

With crypto’s bombastic push now behind us, the conversation now leans toward a sovereign wealth fund that seemed bright in early headlines but has faded. Re‑introducing that idea could strengthen the National Production for National Security theory, turning crypto from a trendy asset into a strategic national power.

Bottom Line

Tariff Talk: August 1st Mid‑Staged Drama

Bet your breath that the week is about to hit the “tariff buzzer.” With the August 1 deadline looming, trade folks are all ears—looking for a breakout of deals that could hush the whole gnarled situation. The buzz? The government’s been seen trimming the fat on those high‑level tariffs, saying it’s ready to nod along and extend concessions to key partners. That’s the tone on the table.

Was It a Mirage or Real Talk?

Remember the “Liberation Day” tariffs that got slapped on—only to be pulled back like a magic trick? That might mean the market’s reaction would be a mild hiss if the letter‑based tariffs ever wheels out. Last round, market pressure had the admin waving a quick “nope” and then going back to a version that felt like a reciprocal shuffle, whatever that looks like in numbers. If the markets weren’t behind, why would the bureau backtrack? The classic chicken‑egg question—nothing’s changed the core worry: “Fool Me Once, Not Again.”

Summer Preview: Quiet or Chaos?
- The week ahead promises predictability—almost boring.
- Unexpected headlines are going to give the quiet a twist, but the real fireworks likely sit in the week after.
- We’re gearing up for what will truly shake the summer scorecard.
A Side Gig: First Wrigley Game

Side note—caught my first baseball game at Wrigley. Felt like a fresh chapter: the crack of the bat and the roar of the crowd sent a chill that was as cool as a summer breeze. Pulling that back into the editorial mix means we’re mixing the mundane day‑to‑day with the big trade headlines—just the right amount of spectacle.

Looking Ahead

We’re riding the quiet summer wave and prepping for the next big move—maybe the market’s next price twist or a tariff twist. Stay tuned, and buckle up; the next week promises some real moves that could send everyone’s vacations into a carnival of hustle.
2023-07-30