A real trade agreement is highly detailed, so things are still uncertain, says Eric Rosengren
Eric Rosengren, Former Boston Fed president, joins 'Money Movers' to discuss the CPI report, Commerce Secretary Lutnick's comments on the U.S.-China trade talks and the economy.
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13 hours ago
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Bungling Lutnick And Miller Self-Own in Back-Slapping Tweets
When Secretary of Commerce Howard Lutnick tweeted out a Wall Street Journal article that said the Donald Trump-imposed tariffs had 'generated $ 37.8 billion in revenue for the U.S. in April and May,' he was probably expecting some MAGA back-slapping. That dutifully arrived in the form of White House Deputy Chief of Staff Stephen Miller, with his fellow Donald Trump acolyte retweeting Lutnick's X post. Except neither of them, apparently, appeared to have read beyond the first paragraph. For there, not exactly hidden, was the phrase: 'The tally, while a big jump, still falls short of the amount Trump has said the U.S. is raking in.' In an article published on Wednesday, headlined 'Here's How Much Money the U.S. Is Earning From Tariffs, in Charts,' the WSJ analyzed Treasury data. It said the government had made $37.8 billion in total in duties after President Trump imposed tariffs on a range of sectors, including 'steel, aluminum, cars, and goods from China, Mexico, and Canada'—$15.6 billion in April and $22 billion in May. However, compared to what Trump has said tariffs were bringing into U.S. coffers, this is some way off—between 70% and 82% less according to Daily Beast analysis, in fact, depending on which of Trump's claims to credit. Before his 90-day pause, Trump had claimed on April 8, 'We're making a fortune with tariff. $2bn a day.' Then, just two days later, on April 10, he went further still in a Cabinet meeting, saying that 'the number is probably $3.5 billion a day,' per With 61 days in April and May, that would have worked out to either $122bn or $213.5bn respectively, which would work out at $84bn or $178bn less than the government's own official figures tweeted out by Trump's close friend Lutnick. Lutnick, Miller, and the White House did not espond to the Daily Beast's request for comment.
Yahoo
15 hours ago
- Yahoo
Tariffs will impact inflation in a 'steady drip,' not a surge
Tariff effects may take years to fully show up in inflation data. John Leer, chief economist at Morning Consult, joins Catalysts to explain why businesses are passing on costs slowly and what that means for consumer prices and hiring. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. The May Consumer Price Index is set to be released on Wednesday. Core year of year inflation expected to come in at 2.9%, and core prices expected to tick up three tenths of a percent higher for the month. Investors expecting the Fed to hold rates steady in the June meeting as inflation remains stubbornly above its 2% target. For more, I want to bring in John Leer, he's Morning Consults Chief economist, on what to expect from this week's data. Great to have you on here, John. Talk to me about what you're anticipating ahead of that key CPI print this week. Yeah, thanks for having me. Well, I think, as you mentioned, I expect to see inflation remain stubbornly high. I still don't think we're going to fully see the impact of, uh, tariffs on inflation. I imagine that will be spread out over the course of the full year with some of it actually backloaded towards the end of the year as businesses increasingly face pressures to pass on, uh, elevated costs. But I think the real question from this particular report is going to be how concentrated are those tariff related, tariff-induced, uh, cost increases. Uh, my expectation is that it will remain fairly muted, uh, through the month of May. So when do we finally see it? I keep feeling like sources are telling me, oh, we can ignore this data, we can ignore this data, we don't have the tariffs in place yet. When can I finally say, okay, guys, we can't ignore it anymore? We see something, I think pretty different relative to the consensus. We run a quarterly survey with the Federal Reserve Bank of Boston, and it showed that, uh, small businesses, at least, expect to spend, um, roughly two years passing on the full cost of tariffs to their customers. And so my expectation is actually that we will see sort of a steady drip of price increases rather than this one-off, uh, surge. Due likely to the sort of competitive dynamics in the US economy, it doesn't benefit any company to be the first one out to increase costs when, in fact, the tariff policy might, might change underneath you. And so we really need to see more stable policy announcements, and that, I think, will lead to, uh, a pretty, uh, gradual but protracted period of cost increases. Yeah, and similarly, what are you hearing from those small businesses about the employment picture going forward? Our read is that employment actually has not, uh, pulled back. I think what we see is that the rate of hiring has slowed, um, but it's been slowing at a, on a trajectory sort of consistent with where we were prior to the tariffs. So it doesn't look to us like tariff induced, uh, we've seen tariff induced hiring pullback or hiring slowdown. And that's really counter again to the narrative that existed, let's say a few months ago where everyone expected tariff uncertainty to drive and pull back an investment and then even potentially, uh, uh, elevated layoffs. We simply don't see that. I think small businesses and consumers out there as well, what they're seeing is that the, the, the world remains fairly uncertain. It still is in the financial interest of companies to keep workers on their payrolls when there's so much demand, um, to benefit from. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15 hours ago
- Yahoo
CPI data: Fed rate cuts are 'back in the conversation'
Bob Lang, Explosive Options technical analyst, joins Catalysts with Madison Mills to explain how May's positive Consumer Price Index (CPI) report marks the third consecutive month of cooling inflation data, and how that factors into the Federal Reserve's decisions on rate cuts next week and all year. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. I want to bring in our contributor for the hour. We've got Bob Lane back with us. He is explosive options, technical analysts, a great voice to have when we are looking for clarity in the market because sometimes when the sentiment gets over its skis, you can bring us back to earth with the technicals. I want to start on the inflation data. We saw the market have a significant move to the upside. We're coming in just a bit off of that. How would you describe the market reaction? Uh, quite a bit of a surprise, Maddie. I was looking for, uh, a little bit of an increase in, uh, inflation over the prior month, over April. I mean, it came in with a 0.1 print on the core number, which is the number that the Fed really pays much more attention to than just the headline number. Even though the headline number did come in actually a little bit less than expected as well, as well 2.4% annualized. I think it's important to to recognize that, uh, inflation over the last three months has been heading lower. Just one print is not all that important. But as the Fed has, uh, has talked about in the past, Chair Powell has mentioned in several of his press conferences, what's important is to to pay attention to the trend and trend what he looks at is something like about three to five months worth of data in a row. So, so now we have three prints in a row. We have March, April, and May that have shown very much, uh, lower inflation. Prices are starting to stabilize, which is what the Fed is looking for. I think now that rate cuts are back in the conversation at next week's meeting. And you know, I I know some people have already come out and started talking about that as well too. But I think it's a serious conversation that the Fed has to have. I think the last Wow. projections that they had back in March, Maddie, was for two rate cuts in 2025. I still don't think that's going to change next week when they the new projections coming out in June. But I I do think that there's going to be a, uh, a legion of people on the Fed and the voting, uh, block of the Fed that's going to start saying, hey, listen, you know what? The the the proof is in the data here. We've been paying attention to the data. We need to start talking about rate cuts again. And and what's interesting is the economists that we've spoken with throughout our program in this morning have said, look, don't fully trust this because it doesn't have the totality of the tariff policy baked in just yet. But the Fed can't think about the tariff policy impact until it's shown in the data, right? That's that's the squishy part of this whole situation here. When are, uh, price increases from tariffs actually going to be reflected in the data? And, you know, really it's a it's it's hit or miss over here. It could be next month or it could be in six months from now. So, I think that that is the reason why the Fed is taking much more cautious approach as to to Fed policy going forward. They don't want to make a policy error here that they can't suddenly walk back. And and also you have to remember that Chair Powell is going to be in the seat for about another 11 months. I think May is his next term is going to be up. And, you know, who who's going to be in there to replace him with a similar policy that he's got in place? [beep] Sign in to access your portfolio
