Return Of The Trade Hype

Trade news is back in the spotlight after the Trump Administration announced $50 billion in new tariffs aimed directly at China. The tariffs are directed mostly to correct damage to the intellectual sector, according to officials. China has been mostly silent on trade since the steel and aluminum tariffs were announced, but these new tariffs targeting China specifically is likely to draw a response.

The Trump team has said this is Part 1 of a package of moves it intends to take. China will remain enemy No. 1, but the other parts of the package are likely to include more countries. If the steel and aluminum tariffs were a warning shot in a trade war, this new package is the first real shot.

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In Fed news, Jay Powell, the new chair of the Federal Reserve, was cool, calm, and collected during his first press conference. But it was clear he is not an economist. He refused to commit to any particular economic trigger numbers for ramping up tightening moves. He basically said he would know the economy was overheating when he saw it, and he doesn’t see it now or in the near future. When questioned about the movement of the dots, he downplayed the meaning of the dot game. I was especially glad to hear that.

Read more about the Fed economic forecast and movement in stocks and bonds.

Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.