From U.Michigan, preliminary sentiment at 48.9 vs. 46.1 consensus.
Figure 1: U.Michigan Economic Sentiment (blue), Conference Board Confidence Index (brown), Gallup Confidence (green), all demeaned and divided by standard deviation 2021M01-2025m02. NBER defined peak-to-trough recession dates shaded gray. Red dashed line at “Liberation Day”, purple as US-Iran war start. Source: UMichigan, Gallup, Conference Board, and author’s calculations.
Off topic – the Iran deal:
https://archive.md/4JVF9
Axios reporter Barak Ravid claims to have details of the memorandum of understanding now on the table between the U.S. and Iran. Ravid notes that immediate reopening of the Strait of Hormuz in return for sanctions relief is in the deal, however:
“As of Thursday evening, the deal had been approved on the Iranian side at high levels but likely not by Supreme Leader Mojtaba Khamenei, two sources with knowledge said.”
As one would expect, the reported deal leaves a lot of negotiating for the future. The goal of the MOU is to get Hormuz open and extend the ceasefire. By the way, the ceasefire covers Lebanon. Bibi has been kept in the dark, calling around DC trying to find out what’s going on.
Seriously, if you see the byline “Barak Ravid” you should immediately ignore what he says. He is simply an embedded agent of the White House press office. They call him up, they dictate, he writes dutifully types it up. And since everything out of the White House is a lie, his published stories are lies. Over and over.
It’s a quid pro quo arrangement. In exchange for printing White House propaganda, he is fed a steady diet of stories with no effort required on his part. It’s a living.
Same as the way the White House fed lies about WMDs to Judith Miller about the Iraq War. They are accomplices and enablers.
Bibi needs to realize that when you get into bed with trump, you are the one who gets screwed. look at the litter of politicians and businesspeople who trump has used and trashed in the past.
The Senate has refused to let Bill Pulte become the permanent Director of National Intelligence, because he has no qualification for the job,and because he would very likely have turned intelligence agencies into political tools for the felon-in-chief. Good for the Senate.
Now, the Senate faces a new nominee for Director, Jay Clayton. Clayton has no intelligence or national security experience, either. As an attorney, he earned a dandy paycheck from Alibaba IPO; Alibaba is on DOD’s list of firms linked to China’s military. As U.S. Attorney for Manhattan, Clayton has raised doubts about recent California primary elections – outside his jurisdiction, unsupported by facts and sucking up to the felon-in-chief. So Pulte has a record of using public office to pursue a vile political agenda, and Clayton seems similarly inclined.
And yet, Democrats in Congress seem ready to confirm Clayton, when they couldn’t stomach Pulte. Maybe it comes down to style – a polite Wall-Street-connected neophyte thug, rather than a crass Wall-Street-connected neophyte thug. How is that better?
Can these MAGA heads get any more petty? For the last 12 years the leader of the Fed board has been officially in public and on their website called the gender neutral “Chair”. Warsh is insisting that he be called “Chairman”. Apparently DEI must die.
You, know, I’m not even going to give Warsh a chance. He’s a disgusting MAGA sh**heel just like all the others.
Marketplace radio often asks guests to say what the Fed chair is thinking about rates. The right answer these days is “Who cares?” Monetary policy is set by the majority of the FOMC; outliers lose.
Once, Volcker wanted to raise rates but the majority did not. He couldn’t override them, so he threatened to quit; the Committee came around. I’m pretty sure if Warsh threatens to quit, they’ll let him.
We may be in for a long series of dissents from the chair. I think that would be instructive for the public.
It’s not just his vote on interest rates that is important. Warsh wants to feed the Federal Reserve to the wood chipper the way Musk’s DOGE did to USAID. The way Bondi and Blanche did to the DOJ. He wants to fill the Federal Reserve staff and researchers with Trump loyalists. He wants to remove all regulations on banking and shadow banking.
Can you imagine what it must be like for the academic economists at the Federal Reserve to be working under this guy? He has made clear his disgust for the people working there. I imagine a lot of fear and anxiety.
He can do immense damage way beyond just interest rates.
Off topic – Water as weapon, Round 2:
https://www.independent.co.uk/asia/india/india-pakistan-indus-water-treaty-modi-b2993159.html
India recently decided to end a 6-decade water-sharing deal with Pakistan. Now, Modi has ordered that “not a single drop” flows from India to Pakistan. Not sure that’s possible, though underlings say they’re working on it.
India and Pakistan are already sending the occasional artillery barrage at each other, so it’s not like they aren’t at war already. Cutting water supply to a large part of Pakistan seems like a serious escalation. I also have to think Pakistan’s response will involve bombing structures used to keep water from flowing to Pakistan.
There is always more to these stories than ends up in headlines. Beyond Modi’s Hindu nationalism schtick, I got nothin’ on this one so far.
Just a heads up – NAFTA (aka USMCA) is up for review next month. Naturally, the felon-in-chief is making noises about cancelling the agreement:
https://www.cbc.ca/news/politics/trump-cusma-usmca-trade-renew-9.7230164
Cancellation would expose not only Canadian and Mexican imports to the U.S. to much higher global tariff rates, but also U.S. exports to Canada and Mexico.
All this talk about a recession in Canada? Just a warmup for what would happen if the agreement is scuttled. All for the vanity of an angry old man.