Here today [update — links to papers and slides]
Conference: “Global Shocks, Macroeconomic Spillovers and Geopolitical Risks: Policy Challenges” [updated with links]
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Policy Uncertainty Remains High Despite Electronics Tariff Respite
Surprise!
Is the Michigan Economic Sentiment Index at Recession Levels? Answer: Yes!
The current reading of 50.8 is below the 73.4 average reading over NBER peak-to-trough recessions dates (1990M01-2025M03):
Economic Policy Uncertainty Hits Record High
Even if likely to be revised, it’s still remarkable. VIX down as high yield credit spread rises.
Trump Blinks (For Now)
From Bloomberg:
President Donald Trump’s administration exempted smartphones, computers and other electronics from its so-called reciprocal tariffs, representing a major reprieve for global technology manufacturers including Apple Inc. and Nvidia Corp. even if it proves a temporary one.
The exclusions, published late Friday by US Customs and Border Protection, narrow the scope of the levies by excluding the products from Trump’s 125% China tariff and his baseline 10% global tariff on nearly all other countries.
The exclusions apply to smartphones, laptop computers, hard drives and computer processors and memory chips. Those popular consumer electronics items generally aren’t made in the US.
Is the Michigan Survey a Fluke? Are Republicans Still Optimistic? Do Republicans See Inflation Rising?
No. Yes/No. Yes.
Compare the U.Michigan survey to SF News Sentiment index and Conference Board:
Retail Egg Prices Up, Wholesale Down for Now – Forecasts Up
The egg crisis of 2025 is not over yet — consider what happens if tariffs are put on egg imports?
Inflation Expectations Explode, Sentiment Collapses (U. Michigan)
Preliminary data today:
Instantaneous CPI Inflation
Rates are down, but not as far down as in mid-2024.
Expect Drops in Interest Rates
The yield curve looks like this as of today’s close: