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Trump’s Trade War by the NIPA Numbers

National Income and Product Accounts numbers that is. I was prepping for macro lecture on Monday, which covers open economy macro. One topic I planned to cover is evaluation of the Trump trade war. We know the Phase 1 trade deal with China was a miserable

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3 years ago

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National Income and Product Accounts numbers that is.

I was prepping for macro lecture on Monday, which covers open economy macro. One topic I planned to cover is evaluation of the Trump trade war. We know the Phase 1 trade deal with China was a miserable failure, and was failing miserably even before Covid-19 struck the US.

What about the US trade balance overall? As any decent macroeconomist knows, the trade balance is not a particularly useful measure of economic performance in the absence of context, but Mr. Trump has made it a key metric. So, here are US exports, imports, in real terms.

Figure 1: Exports of goods and services ex-oil (blue), imports of goods and services ex oil (brown), both SAAR, bn.Ch.2012$. Orange shading denotes the trade war, dated from Trump’s White House statement of intent on Section 232. Sums approximated by simple addition/subtraction. Source: BEA, 2020Q3 2nd release, author’s calculations.

I exclude oil to the extent that trade policy doesn’t really impact here, but the results do not change substantively even if oil is included. Even before Covid-19 struck, US real imports were up, and US real exports were down relative to 2018Q1, when I date the trade war starting. (Including oil means that exports were static, up about 1 (one) billion Ch.2012$ (non-annualized).

For those interested, imports were higher in 2019Q4 than when Mr. Trump took office. Exports were a bit higher (23 bn. Ch.12$). Net exports in total were down $6.2 billion.

Mr. Trump has often dismissed services imports and exports as irrelevant (in this sense, Mr. Trump is remarkably “Marxian” in the old sense of the word). So, let’s take a look at the ex-services flows.

Figure 1: Exports of goods ex-oil (blue), imports of goods ex oil (brown), both SAAR, bn.Ch.2012$. Orange shading denotes the trade war, dated from Trump’s White House statement of intent on Section 232. Sums approximated by simple addition/subtraction. Source: BEA, 2020Q3 2nd release, author’s calculations.

Exports of goods were down, while imports of goods up slightly.

Why was Trump’s trade war unsuccessful, even on terms he set? Any decent macroeconomist will tell you, but I’ll just quote Blanchard (Macroeconomics, 8th edition): (1) “To the extent that it triggered a tariff war, and other countries responded by raising tariffs on US goods, US exports might decrease in line with the decrease in US imports..) (2) To the extent that the US economy was close to potential, as was indeed the case in 2018, an increase in output might lead to overheating and thus force the Fed to increase the interest rate. This in turn would lead to a dollar appreciation… (3) Even if the Fed did not increase the interest rate, expectations of a lower trade deficit and thus smaller need for foreign borrowing, now and in the future, may lead to an appreciation of the dollar… (4) Finally, while it was increasing tariffs, the Trump administration also implemented a tax reform passed in 2017, which led to a large increase in the fiscal deficit in 2018…” (page 408).

I’ve mentioned each one of these (save 3) in previous posts. To these, let me add that the slapdash and unprecedented nature of the trade policy approach led to really high levels of economic policy uncertainty — both at home, particularly with respect to trade policy, and abroad — that further appreciated the US dollar, crowding out net exports further.

 

As of November 2019, Blanchard indicated that it was “too early to make strong conclusions” about the trade war’s outcome. I think with an additional year’s data, we can conclude that — on Mr. Trump’s own terms — Trump was a loser.

Postscript: Before I forget, the war was a loser on employment, consumer costs, etc. too…

Manufacturing Employment, Hours and Output and the Trade War, Pre-Covid-19

Guest Contribution: “The Trade War Has Cost 175,000 Manufacturing Jobs and Counting”

 

The US-China Trade War/Soybean Front: Home before the (Next Batch of) Leaves Fall

 

Iron and Steel Primary Production Employment

Dispatches from the Trade Wars

In Bizarro World

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Merck’s six-year deal strategy could deliver a blockbuster if hypertension drug is OK’d this month

With an FDA decision expected next week for its blood pressure drug sotatercept, Merck is hoping that its bundle of acquisitions in recent years will lead…

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March 18, 2024

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With an FDA decision expected next week for its blood pressure drug sotatercept, Merck is hoping that its bundle of acquisitions in recent years will lead to multiple approvals and late-stage clinical wins.

The regulator is set to decide whether to approve the pulmonary arterial hypertension drug known as sotatercept by March 26. If approved, the drug could generate $1.9 billion in sales in 2025, according to Leerink Partners analyst Daina Graybosch.

The subcutaneous treatment came to Merck by way of its $11.5 billion acquisition of Acceleron in 2021.

Sunil Patel

“We viewed [Acceleron] as a great Merck-type company to own, especially with their legacy of R&D,” Sunil Patel, Merck’s head of corporate development and business development & licensing, said in an interview.

For the past few years, the pharma giant has been amassing help from external biotechs to broaden its pipeline and prepare for the looming patent deadline for Keytruda, the cancer immunotherapy that had $25 billion in sales last year. It’s Merck’s most notable treatment to come from external innovation; Organon made the drug, known then as pembrolizumab, and was bought by Schering-Plough, which merged with Merck in 2009.

Now, Merck is once again hoping a drug that it bet billions of dollars on will lead a spate of approvals out of its promising late-stage pipeline. The company has put at least $50 billion toward business development since 2018. Aside from Covid-19 treatment Lagevrio, which was authorized in late 2021 and developed with Ridgeback Biotherapeutics, Merck’s dealmaking over the past few years has not produced another blockbuster medicine.

In three months, Merck could have another approval in patritumab deruxtecan, an antibody-drug conjugate it’s developing with Daiichi Sankyo, in certain forms of non-small cell lung cancer. The FDA set a decision date of June 26. As part of the $4 billion upfront deal, Merck is co-developing and co-commercializing three antibody-drug conjugates with the ADC powerhouse.

Merck also expects a late-stage race with Roche in the inflammatory market, stemming from its $10.8 billion acquisition of Prometheus Biosciences last year. It began a Phase III of Prometheus’ lead drug, now called tulisokibart or MK-7240, in ulcerative colitis last fall. Meanwhile, the company also bagged a Phase I/II cancer drug via its more relatively modest $680 million acquisition of Harpoon Therapeutics earlier this year.

The acquisitions are likely to keep coming. Merck CEO Rob Davis said earlier this year the pharma is willing to spend as much as $15 billion on M&A.

It’s made more than 20 biotech acquisitions in the past 10 years, and that has led to at least 17 compounds that have been approved or are in mid- and late-stage development, Patel said.

“This current management team is deeply rooted in the legacy of this company. They understand the importance of building a long-term sustainable future, and they’re just not afraid to make the bold scientific bets,” he said.

Last year, Merck adjusted the way it calculates R&D spending to factor in M&A and licensing costs, and doing so catapulted the company to the top of Endpoints News’ 2023 pharma R&D expenditure list.

But not all deals have been smooth. Merck discontinued a Covid-19 treatment candidate from its 2020 acquisition of OncoImmune. And a chronic cough drug that it gained through its 2016 acquisition of Afferent Pharmaceuticals has twice been rejected by the FDA. The drug has been approved in Europe, Switzerland and Japan.

All told, Merck inks about 80 to 100 business development transactions per year, Patel said. That includes licensing pacts and early-stage collaborations, like a $1 billion biobuck-loaded deal for new biologics with Pearl Bio that it announced last week.

“Once we get through the science, we act decisively and very rapidly to bring the right type of BD structure,” said Patel, who’s been at Merck Research Laboratories for 25 years.

Dean Li

About 80 employees search and evaluate potential transactions, which are then presented to a committee led by Dean Li, president of Merck Research Laboratories. Li joined Merck in 2017 from the University of Utah Health, where he co-founded biotechs such as Recursion and Hydra Biosciences.

“It’s seamless between Merck Research Labs and the BD unit. We’re just one simple group that operates with the one pipeline mentality,” Patel said.

About 60% of the Acceleron team remains at Merck.

“That’s a testament to how we can integrate these teams and how we embrace the science that we’re acquiring,” he said.

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Key Events This Week: Central Banks Galore Including A Historic Rate Hike By The BOJ

Key Events This Week: Central Banks Galore Including A Historic Rate Hike By The BOJ

According to DB’s Jim Reid, "this could be a landmark…

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2 hours ago

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March 18, 2024

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Key Events This Week: Central Banks Galore Including A Historic Rate Hike By The BOJ

According to DB's Jim Reid, "this could be a landmark week in markets as the last global holdout on negative rates looks set to be removed as the BoJ likely hikes rates from -0.1% tomorrow." That will likely overshadow the FOMC that concludes on Wednesday that will have its own signalling intrigue given recent strong inflation. We also have the RBA meeting tomorrow and the SNB and BoE meetings on Thursday to close out a big week for global central bankers with many EM countries also deciding on policy. We’ll preview the main meetings in more depth below but outside of this we have the global flash PMIs on Thursday as well as inflation reports in Japan (Thursday) and the UK (Wednesday). US housing data also permeates through the week as you'll see in the full global day-by-day week ahead at the end as usual.

Let’s go into detail now, starting with the BoJ tomorrow. We’ve had negative base rates now for 8 years which if is the longest run ever seen for any country in the history of mankind. In fact it is doubtful that pre-historic man was as generous as to charge negative interest rates on lending money prior to this! It also might be one of the longest global runs without any interest rate hikes given the 17 year run that could end tomorrow. So, as Reid puts it, a landmark event.

DB's Chief Japan economist expects the central bank to revise its policy and abandon both NIRP and the multi-tiered current account structure and set rates on all excess reserves at 0.1%. He also sees both the yield curve control (YCC) and the inflation-overshooting commitment ending, replaced by a benchmark for the pace of the bank’s JGB purchasing activity. The house view forecast of 50bps of hikes through 2025 is more hawkish than the market but risks are still tilted to the upside. On Friday, the Japan Trade Union Confederation (Rengo) announced the first tally of the results of this year's shunto spring wage negotiation. The wage increase rate, including the seniority-based wage hike, is 5.28%, which was significantly higher than expected. This year will probably see the highest wage settlements since 1991 which given Japan’s recent history is an incredible turnaround. This wage data news has firmed up expectations for tomorrow.

With regards to the FOMC which concludes on Wednesday, DB economists expect only minor revisions to the meeting statement that saw an overhaul last meeting. With regards to the SEP, the growth and unemployment forecasts are unlikely to change but the 2024 inflation forecasts potentially could; elsewhere, expect the Fed to revise up their 2024 core PCE inflation forecast by a tenth to 2.5%, although they see meaningful risks that it gets revised up even higher to 2.6%. In our economists' view, a 2.5% core PCE reading would allow just enough wiggle room to keep the 2024 fed funds rate at 4.6% (75bps of cuts). However, if core PCE inflation were revised up to 2.6%, it would likely entail the Fed moving their base case back to 50bps of cuts, as this would essentially reflect the same forecasts as the September 2023 SEP.

Beyond 2024, DB expect officials to build in less policy easing due to a higher r-star. If two of the eight officials currently at 2.5% move up by 25bps, then the long-run median forecast would edge up to 2.6%. This could be justified by a one-tenth upgrade to the long-run growth forecast. After all this information is released the presser from Powell will of course be heavily scrutinised, especially on how Powell sees recent inflation data. Powell should also provide an update on discussions around QT but it is unlikely they are ready yet to release updated guidance.

One additional global highlight this week might be a big fall in UK inflation on Wednesday, suggesting that headline CPI will slow to 3.4% (vs 4% in January) and core to 4.5% (5.1%). Elsewhere there is plenty of ECB speaker appearances including President Lagarde on Wednesday. They are all highlighted in the day-by-day guide at the end.

Courtesy of DB, here is a day-by-day calendar of events

Monday March 18

  • Data: US March New York Fed services business activity, NAHB housing market index, China February retail sales, industrial production, property investment, Eurozone January trade balance, Canada February raw materials, industrial product price index, existing home sales

Tuesday March 19

  • Data: US January total net TIC flows, February housing starts, building permits, Japan January capacity utilization, Germany and Eurozone March Zew survey, Eurozone Q4 labour costs, Canada February CPI
  • Central banks: BoJ decision, ECB's Guindos speaks, RBA decision
  • Auctions: US 20-yr Bond ($13bn, reopening)

Wednesday March 20

  • Data: UK February CPI, PPI, RPI, January house price index, China 1-yr and 5-yr loan prime rates, Japan February trade balance, Italy January industrial production, Germany February PPI, Eurozone March consumer confidence, January construction output
  • Central banks: Fed's decision, ECB's Lagarde, Lane, De Cos, Schnabel, Nagel and Holzmann speak, BoC summary of deliberations
  • Earnings: Tencent, Micron

Thursday March 21

  • Data: US, UK, Japan, Germany, France and Eurozone March PMIs, US March Philadelphia Fed business outlook, February leading index, existing home sales, Q4 current account balance, initial jobless claims, UK February public finances, Japan February national CPI, Italy January current account balance, France March manufacturing confidence, February retail sales, ECB January current account, EU27 February new car registrations
  • Central banks: BoE decision, SNB decision
  • Earnings: Nike, FedEx, Lululemon, BMW, Enel
  • Auctions: US 10-yr TIPS ($16bn, reopening)
  • Other: European Union summit, through March 22

Friday March 22

  • Data: UK March GfK consumer confidence, February retail sales, Germany March Ifo survey, January import price index, Canada January retail sales

* * *

Finally, looking at just the US, Goldman notes that the key economic data releases this week are the Philadelphia Fed manufacturing index and existing home sales reports on Thursday. The March FOMC meeting is on Wednesday. The post-meeting statement will be released at 2:00 PM ET, followed by Chair Powell’s press conference at 2:30 PM. There are several speaking engagements from Fed officials this week, including Chair Powell, Vice Chair for Supervision Barr, and President Bostic.

Monday, March 18

  • There are no major economic data releases scheduled.

Tuesday, March 19

  • 08:30 AM Housing starts, February (GS +9.4%, consensus +7.4%, last -14.8%); Building permits, February (consensus +2.0%, last -0.3%)

Wednesday, March 20

  • 02:00 PM FOMC statement, March 19 – March 20 meeting: As discussed in our FOMC preview, we continue to expect the committee to target a first cut in June, but we now expect 3 cuts in 2024 in June, September, and December (vs. 4 previously) given the slightly higher inflation path. We continue to expect 4 cuts in 2025 and now expect 1 final cut in 2026 to an unchanged terminal rate forecast of 3.25-3.5%. The main risk to our expectation is that FOMC participants might be more concerned about the recent inflation data and less convinced that inflation will resume its earlier soft trend. In that case, they might bump up their 2024 core PCE inflation forecast to 2.5% and show a 2-cut median.

Thursday, March 21

  • 08:30 AM Current account balance, Q4 (consensus -$209.5bn, last -$200.3bn)
  • 08:30 AM Philadelphia Fed manufacturing index, March (GS 3.2, consensus -1.3, last 5.2): We estimate that the Philadelphia Fed manufacturing index fell 2pt to 3.2 in March. While the measure is elevated relative to other surveys, we expect a boost from the rebound in foreign manufacturing activity and the pickup in US production and freight activity.
  • 08:30 AM Initial jobless claims, week ended March 16 (GS 210k, consensus 215k, last 209k): Continuing jobless claims, week ended March 9 (consensus 1,815k, last 1,811k)
  • 09:45 AM S&P Global US manufacturing PMI, March preliminary (consensus 51.8, last 52.2): S&P Global US services PMI, March preliminary (consensus 52.0, last 52.3)
  • 10:00 AM Existing home sales, February (GS +1.2%, consensus -1.6%, last +3.1%)
  • 02:00 PM Federal Reserve Vice Chair for Supervision Barr speaks: Federal Reserve Vice Chair Michael for Supervision Barr will participate in a fireside chat in Ann Arbor, MI with students and faculty. A moderated Q&A is expected. On February 14, Barr said the Fed is “confident we are on a path to 2% inflation,” but the recent report showing prices rose faster than anticipated in January “is a reminder that the path back to 2% inflation may be a bumpy one.” Barr also noted that “we need to see continued good data before we can begin the process of reducing the federal funds rate.”

Friday, March 22

  • 09:00 AM Fed Reserve Chair Powell speaks: The Federal Reserve Board will host a Fed Listens event in Washington D.C. on “Transitioning to the Post-Pandemic Economy.” Chair Powell will deliver opening remarks. Vice Chair Phillip Jefferson and Fed Governor Michelle Bowman will moderate conversations with leaders from various organizations. On March 6, Chair Powell noted in his congressional testimony that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.
  • 12:00 PM Federal Reserve Vice Chair for Supervision Barr speaks: Federal Reserve Vice Chair for Supervision Michael Barr will participate in a virtual event on “International Economic and Monetary Design.” A moderated Q&A is expected.
  • 04:00 PM Atlanta Fed President Bostic (FOMC voter) speaks: Atlanta Fed President Raphael Bostic will participate in a moderated conversation at the 2024 Household Finance Conference in Atlanta. On March 4, Bostic said, “I need to see more progress to feel fully confident that inflation is on a sure path to averaging 2% over time.” Bostic also noted, “I expect the first interest rate cut, which I have penciled in for the third quarter, will be followed by a pause in the following meeting.”

Source: DB, Goldman, BofA

Tyler Durden Mon, 03/18/2024 - 09:59

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Key Events This Week: Central Banks Galore Including A Historic Rate Hike By The BOJ

Key Events This Week: Central Banks Galore Including A Historic Rate Hike By The BOJ

According to DB’s Jim Reid, "this could be a landmark…

Published

2 hours ago

on

March 18, 2024

By

Key Events This Week: Central Banks Galore Including A Historic Rate Hike By The BOJ

According to DB's Jim Reid, "this could be a landmark week in markets as the last global holdout on negative rates looks set to be removed as the BoJ likely hikes rates from -0.1% tomorrow." That will likely overshadow the FOMC that concludes on Wednesday that will have its own signalling intrigue given recent strong inflation. We also have the RBA meeting tomorrow and the SNB and BoE meetings on Thursday to close out a big week for global central bankers with many EM countries also deciding on policy. We’ll preview the main meetings in more depth below but outside of this we have the global flash PMIs on Thursday as well as inflation reports in Japan (Thursday) and the UK (Wednesday). US housing data also permeates through the week as you'll see in the full global day-by-day week ahead at the end as usual.

Let’s go into detail now, starting with the BoJ tomorrow. We’ve had negative base rates now for 8 years which if is the longest run ever seen for any country in the history of mankind. In fact it is doubtful that pre-historic man was as generous as to charge negative interest rates on lending money prior to this! It also might be one of the longest global runs without any interest rate hikes given the 17 year run that could end tomorrow. So, as Reid puts it, a landmark event.

DB's Chief Japan economist expects the central bank to revise its policy and abandon both NIRP and the multi-tiered current account structure and set rates on all excess reserves at 0.1%. He also sees both the yield curve control (YCC) and the inflation-overshooting commitment ending, replaced by a benchmark for the pace of the bank’s JGB purchasing activity. The house view forecast of 50bps of hikes through 2025 is more hawkish than the market but risks are still tilted to the upside. On Friday, the Japan Trade Union Confederation (Rengo) announced the first tally of the results of this year's shunto spring wage negotiation. The wage increase rate, including the seniority-based wage hike, is 5.28%, which was significantly higher than expected. This year will probably see the highest wage settlements since 1991 which given Japan’s recent history is an incredible turnaround. This wage data news has firmed up expectations for tomorrow.

With regards to the FOMC which concludes on Wednesday, DB economists expect only minor revisions to the meeting statement that saw an overhaul last meeting. With regards to the SEP, the growth and unemployment forecasts are unlikely to change but the 2024 inflation forecasts potentially could; elsewhere, expect the Fed to revise up their 2024 core PCE inflation forecast by a tenth to 2.5%, although they see meaningful risks that it gets revised up even higher to 2.6%. In our economists' view, a 2.5% core PCE reading would allow just enough wiggle room to keep the 2024 fed funds rate at 4.6% (75bps of cuts). However, if core PCE inflation were revised up to 2.6%, it would likely entail the Fed moving their base case back to 50bps of cuts, as this would essentially reflect the same forecasts as the September 2023 SEP.

Beyond 2024, DB expect officials to build in less policy easing due to a higher r-star. If two of the eight officials currently at 2.5% move up by 25bps, then the long-run median forecast would edge up to 2.6%. This could be justified by a one-tenth upgrade to the long-run growth forecast. After all this information is released the presser from Powell will of course be heavily scrutinised, especially on how Powell sees recent inflation data. Powell should also provide an update on discussions around QT but it is unlikely they are ready yet to release updated guidance.

One additional global highlight this week might be a big fall in UK inflation on Wednesday, suggesting that headline CPI will slow to 3.4% (vs 4% in January) and core to 4.5% (5.1%). Elsewhere there is plenty of ECB speaker appearances including President Lagarde on Wednesday. They are all highlighted in the day-by-day guide at the end.

Courtesy of DB, here is a day-by-day calendar of events

Monday March 18

  • Data: US March New York Fed services business activity, NAHB housing market index, China February retail sales, industrial production, property investment, Eurozone January trade balance, Canada February raw materials, industrial product price index, existing home sales

Tuesday March 19

  • Data: US January total net TIC flows, February housing starts, building permits, Japan January capacity utilization, Germany and Eurozone March Zew survey, Eurozone Q4 labour costs, Canada February CPI
  • Central banks: BoJ decision, ECB's Guindos speaks, RBA decision
  • Auctions: US 20-yr Bond ($13bn, reopening)

Wednesday March 20

  • Data: UK February CPI, PPI, RPI, January house price index, China 1-yr and 5-yr loan prime rates, Japan February trade balance, Italy January industrial production, Germany February PPI, Eurozone March consumer confidence, January construction output
  • Central banks: Fed's decision, ECB's Lagarde, Lane, De Cos, Schnabel, Nagel and Holzmann speak, BoC summary of deliberations
  • Earnings: Tencent, Micron

Thursday March 21

  • Data: US, UK, Japan, Germany, France and Eurozone March PMIs, US March Philadelphia Fed business outlook, February leading index, existing home sales, Q4 current account balance, initial jobless claims, UK February public finances, Japan February national CPI, Italy January current account balance, France March manufacturing confidence, February retail sales, ECB January current account, EU27 February new car registrations
  • Central banks: BoE decision, SNB decision
  • Earnings: Nike, FedEx, Lululemon, BMW, Enel
  • Auctions: US 10-yr TIPS ($16bn, reopening)
  • Other: European Union summit, through March 22

Friday March 22

  • Data: UK March GfK consumer confidence, February retail sales, Germany March Ifo survey, January import price index, Canada January retail sales

* * *

Finally, looking at just the US, Goldman notes that the key economic data releases this week are the Philadelphia Fed manufacturing index and existing home sales reports on Thursday. The March FOMC meeting is on Wednesday. The post-meeting statement will be released at 2:00 PM ET, followed by Chair Powell’s press conference at 2:30 PM. There are several speaking engagements from Fed officials this week, including Chair Powell, Vice Chair for Supervision Barr, and President Bostic.

Monday, March 18

  • There are no major economic data releases scheduled.

Tuesday, March 19

  • 08:30 AM Housing starts, February (GS +9.4%, consensus +7.4%, last -14.8%); Building permits, February (consensus +2.0%, last -0.3%)

Wednesday, March 20

  • 02:00 PM FOMC statement, March 19 – March 20 meeting: As discussed in our FOMC preview, we continue to expect the committee to target a first cut in June, but we now expect 3 cuts in 2024 in June, September, and December (vs. 4 previously) given the slightly higher inflation path. We continue to expect 4 cuts in 2025 and now expect 1 final cut in 2026 to an unchanged terminal rate forecast of 3.25-3.5%. The main risk to our expectation is that FOMC participants might be more concerned about the recent inflation data and less convinced that inflation will resume its earlier soft trend. In that case, they might bump up their 2024 core PCE inflation forecast to 2.5% and show a 2-cut median.

Thursday, March 21

  • 08:30 AM Current account balance, Q4 (consensus -$209.5bn, last -$200.3bn)
  • 08:30 AM Philadelphia Fed manufacturing index, March (GS 3.2, consensus -1.3, last 5.2): We estimate that the Philadelphia Fed manufacturing index fell 2pt to 3.2 in March. While the measure is elevated relative to other surveys, we expect a boost from the rebound in foreign manufacturing activity and the pickup in US production and freight activity.
  • 08:30 AM Initial jobless claims, week ended March 16 (GS 210k, consensus 215k, last 209k): Continuing jobless claims, week ended March 9 (consensus 1,815k, last 1,811k)
  • 09:45 AM S&P Global US manufacturing PMI, March preliminary (consensus 51.8, last 52.2): S&P Global US services PMI, March preliminary (consensus 52.0, last 52.3)
  • 10:00 AM Existing home sales, February (GS +1.2%, consensus -1.6%, last +3.1%)
  • 02:00 PM Federal Reserve Vice Chair for Supervision Barr speaks: Federal Reserve Vice Chair Michael for Supervision Barr will participate in a fireside chat in Ann Arbor, MI with students and faculty. A moderated Q&A is expected. On February 14, Barr said the Fed is “confident we are on a path to 2% inflation,” but the recent report showing prices rose faster than anticipated in January “is a reminder that the path back to 2% inflation may be a bumpy one.” Barr also noted that “we need to see continued good data before we can begin the process of reducing the federal funds rate.”

Friday, March 22

  • 09:00 AM Fed Reserve Chair Powell speaks: The Federal Reserve Board will host a Fed Listens event in Washington D.C. on “Transitioning to the Post-Pandemic Economy.” Chair Powell will deliver opening remarks. Vice Chair Phillip Jefferson and Fed Governor Michelle Bowman will moderate conversations with leaders from various organizations. On March 6, Chair Powell noted in his congressional testimony that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.
  • 12:00 PM Federal Reserve Vice Chair for Supervision Barr speaks: Federal Reserve Vice Chair for Supervision Michael Barr will participate in a virtual event on “International Economic and Monetary Design.” A moderated Q&A is expected.
  • 04:00 PM Atlanta Fed President Bostic (FOMC voter) speaks: Atlanta Fed President Raphael Bostic will participate in a moderated conversation at the 2024 Household Finance Conference in Atlanta. On March 4, Bostic said, “I need to see more progress to feel fully confident that inflation is on a sure path to averaging 2% over time.” Bostic also noted, “I expect the first interest rate cut, which I have penciled in for the third quarter, will be followed by a pause in the following meeting.”

Source: DB, Goldman, BofA

Tyler Durden Mon, 03/18/2024 - 09:59

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