I see repeated references to this assertion. As Jason Furman points out, relative to “Liberation Day” announcement, he didn’t, insofar as the increase in tariffs on Chinese goods rose from 54% to 125% even as reciprocal tariffs were delayed 90 days, thus pushing up the effective tariff rate (with no quantity response) to essentially where it was going to.
Ten Days that Shook the Financial World … But for What?
A recap:
Alternative Business Cycle Indicators: Coincident Index, VMT, Early Benchmark NFP
Coincident index growth slows from 4.1% m/m AR to 1.7% in February.
The Recession Start Predicted (Post-Pause)
While the odds on a recession in 2025 have dropped from 69% to 54% in the wake of Trump’s 90 day pause, the predicted start of the recession has not changed much.
A Real-Time US Effective Tariff Rate Measure
From Paweł Skrzypczyński, “Average effective tariff rate in the U.S.”:
*Micro* becomes *Macro* and Macro-Financial Interactions
Gianluca Benigno points out that large and pervasive tariffs will have macro implications that spur deleveraging and a decline in R** in a pernicious (my word) feedback loop.
Stay Tuned for Dollar Share of World FX Reserves
Miran et al. want to end exorbitant privilege and the dollar’s role as a safe asset.
The Yield Curve: Steepening *and* Inverting
The time series, for 3m10s, 2s10s, as well as 1yr-FFR spread Miller (2019) identifies as max AUROC recession predictor at 1 month horizon.
Policy Uncertainty and VIX Down (from Pretty High Levels…)
Data available as of 11am CT today:
Guest Contribution: “Miran, we’re not in Triffin land anymore”
Today, we’re fortunate to have a guest contribution from Michael Bordo (Rutgers) and Robert N McCauley (BU & Oxford). A version of this post was published on VoxEU.