Tariffs, Inflation & Weakness, The Friday Wrap
Commentary from The Distilled Perspective of
Patrick T Bulger, Capital Management & Analytics
Tariff Alarmists, Inflation, and Today
After a full 4 years of people yelling Tariffs...Trump 1.0:
Inflation
Tariffs didn't lead to inflation,
They were not a factor in the underlying trillions data,
The flood of post covid helicopter money & supply chain disruption lead to inflation, hence rate hikes...period.
Tariffs, and Today
Reading here, we viewed tariffs as a sideshow/distraction.
With the Treasury General Account having been bolstered for the, “what ifs", of shutdown 2.0 and negative ruling on the Tariffs,
It's hard for me to imagine that Treasury Secretary Scott Besset could be blind to
Obvious topics and potential outcomes.
Public & Media Hype Extremes, yes. Secretary Besset, NO.
I will call this, in line with the other Tariff Alarmists,
a nothing-burger, distraction, Political Football.
Additionally, there are multiple differing types of ruling appeals reaching complexity that exceeds the nearest person yelling Tariffs. This will play out over time.
Other Data From The Week,
• Undeniably Large Military Buildup in the Middle East.
• Consumer Sentiment numbers hover near 4 decade lows.
• Real Q4 Consumer Spending - US Department of Commerce
Came in at 2.4 vs Q3 at 3.5, a slower pace
• US Production numbers remained underwhelming.
• Philly Fed New Orders grew slower than January readings,
• Prices paid remains elevated beyond prices received.
• Work week declines, number of employees declines.
Viewed as weak in what should be a seasonal uptick.
• Canada saw it's largest raw materials price surge since April of '22, per Statistics Canada data.
Next Week,
China Lunar New Year, break ending on Tuesday the 24th. Markets reopen.
When will military activity commence in the Middle East?
The Takeaway,
We have all the same problems as yesterday and tariffs weren't one of them.
See blog posts from August to now.
We have much bigger fish to fry.
Within in our zone of elevated risk, Risk conditions appear to be rising
Weakness seems to show continuation in Finance, Consumers, Retail & Production.
This is viewed as, all is not well.
No Bazooka, Not Green Shoots...
Not Stimulus. Potentially unwell.
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Thanks for reading,
PTB
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