US Economic News

[EnSabahNur]

A lot of the current US administration doesn't scream "competence" and this is yet another example.

It is hard to believe that they will be able to handle the Middle-East conflict well and prevent a fallout in the financial markets.

Anyway, this tariff thing might even drag on for quite a while, if we consider that the admin intends to levy 15% import duties.


https://sg.finance.yahoo.com/news/us-tel...00393.html

US tells tariff refund judge it can’t comply with order

 US Customs and Border Protection official told a federal judge on Friday that the agency can’t comply with a court order to stop processing import duties that include President Donald Trump’s emergency levies that were struck down by US Supreme Court.

CBP is instead “making all possible efforts” to create an automated refund system that “will be simpler and more efficient” than the current process and may be ready for use in as soon as 45 days, according to an affidavit filed with the judge by Brandon Lord, a CBP executive director.

On Wednesday Eaton had ordered the CBP to remove Trump’s emergency tariffs from its massive backlog of importers’ paperwork. The judge said that doing so would make future refunds easier and he questioned why the government hadn’t already stopped after the Supreme Court’s ruling last month.

Lord said in his affidavit that the current automated system that processes hundreds of thousands of import entries each week cannot siphon out entries that include billions of dollars in tariffs that were collected by the Trump administration under the International Emergency Economic Powers Act, or IEEPA, as the judge ordered.

“CBP is now facing an unprecedented volume of refunds,” Lord said in the filing. “Its existing administrative procedures and technology are not well suited to a task of this scale and will require manual work that will prevent personnel from fully carrying out the agency’s trade enforcement mission.”

In other news, Nintendo has joined the lawsuits to reclaim the illegal tariffs.

https://aftermath.site/nintendo-tariffs-sue/

It's now Mario vs Trump

[specuvestor]

With the spike in oil price probably good to monitor inflation again for next 12 months or so and which I expect to have $100 oil even after Trump de-escalate by end of April due to the 60 days strategic strike limit. It is unlikely Congress will declare war on Iran unless their ships get hit in Hormuz during blockade

Fed has increased year end PCE from 2.4% to 2.7% and Core PCE from 2.5% to 2.7% on 18 March 2026

Mar CPI 3.3%
Mar Core CPI 2.6%

As of 10 Apr Cleveland Fed expecting
Apr CPI 3.58%
Apr Core CPI 2.56%

Mar PCE 3.39%
Mar Core PCE 3.10%
Apr PCE 3.61%
Apr Core PCE 3.17%

July core CPI looks a notch higher coupled with fiscal pump prime Powell might be forced to cut in Sept and wait again

US turning isolationist while BRICS becoming an opposing bloc. Interesting times

Jul CPI 2.705%
Jul Core CPI 3.059%

As of 12 Aug Cleveland Fed expecting
Aug CPI 2.85%
Aug Core CPI 3.05%

Jul PCE 2.60%
Jul Core PCE 2.89%
Aug PCE 2.75%
Aug Core PCE 2.96%

[specuvestor]

US inflation spiked higher than expected but core is more subdued due to slowing housing market. There were actually 4 dissents in the 30 Apr FOMC which is extremely rare but the details is that 3 are against a more dovish statement while one is the same Trump lackey Miran stepping down for Warsh that argues for rate cut since he was appointed.

Apr CPI 3.8%
Apr Core CPI 2.8%

As of 12 May Cleveland Fed expecting
May CPI 4.16%
May Core CPI 2.82%

Apr PCE 3.83%
Apr Core PCE 3.31%
May PCE 4.05%
May Core PCE 3.36%

With the spike in oil price probably good to monitor inflation again for next 12 months or so and which I expect to have $100 oil even after Trump de-escalate by end of April due to the 60 days strategic strike limit. It is unlikely Congress will declare war on Iran unless their ships get hit in Hormuz during blockade

Fed has increased year end PCE from 2.4% to 2.7% and Core PCE from 2.5% to 2.7% on 18 March 2026

Mar CPI 3.3%
Mar Core CPI 2.6%

As of 10 Apr Cleveland Fed expecting
Apr CPI 3.58%
Apr Core CPI 2.56%

Mar PCE 3.39%
Mar Core PCE 3.10%
Apr PCE 3.61%
Apr Core PCE 3.17%

[swakoo]

Warsh Could Find Inflation Too Hot to Handle

There are worse inheritances for Warsh. The AI shock is strong enough to help the stock market withstand interest rates where they are, while the combination of rising inflation and stable employment should be enough to convince even the current administration that lower interest rates are not called for just now.

But if there’s no dilemma for the moment, the odds are that there soon will be. Inflation is growing, and if the supply shock persists there will also be a threat to growth. How Warsh chooses to frame expectations when he takes over promises to be crucial.

[specuvestor]

Oil price has done better than I expected below $100 despite the hostility and false hope as OPEC+ boost production and US lifts sanctions on Russia (ironic)

But US SPR has declined to 350m barrels from 393m a month ago. At this rate in 2 months or so it will be lower than 1982 level of 250m barrels

China supposedly has >1b barrels accumulated last 5 or more years. See who blink first if Hormuz is unresolved next 3 months with US effectively ended the truce yesterday. I'm not even sure how Congress interpretes the 60 days allowance though Hegseth has mentioned the start of truce is when the strike ended so the clock can restart

Unlikely Warsh will hike rates next 3 meetings for political reasons but markets like to test new Fed chair...

May CPI 4.2%
May Core CPI 2.9%

As of 10 Jun Cleveland Fed expecting
Jun CPI 4.05%
Jun Core CPI 2.85%

May PCE 3.97%
May Core PCE 3.30%
Jun PCE 3.84%
Jun Core PCE 3.30%

US inflation spiked higher than expected but core is more subdued due to slowing housing market. There were actually 4 dissents in the 30 Apr FOMC which is extremely rare but the details is that 3 are against a more dovish statement while one is the same Trump lackey Miran stepping down for Warsh that argues for rate cut since he was appointed.

Apr CPI 3.8%
Apr Core CPI 2.8%

As of 12 May Cleveland Fed expecting
May CPI 4.16%
May Core CPI 2.82%

Apr PCE 3.83%
Apr Core PCE 3.31%
May PCE 4.05%
May Core PCE 3.36%

With the spike in oil price probably good to monitor inflation again for next 12 months or so and which I expect to have $100 oil even after Trump de-escalate by end of April due to the 60 days strategic strike limit. It is unlikely Congress will declare war on Iran unless their ships get hit in Hormuz during blockade

Fed has increased year end PCE from 2.4% to 2.7% and Core PCE from 2.5% to 2.7% on 18 March 2026

Mar CPI 3.3%
Mar Core CPI 2.6%

As of 10 Apr Cleveland Fed expecting
Apr CPI 3.58%
Apr Core CPI 2.56%

Mar PCE 3.39%
Mar Core PCE 3.10%
Apr PCE 3.61%
Apr Core PCE 3.17%

[swakoo]

Interesting analysis on oil price conundrum:

Ten Reasons Oil Is Still Below $100 a Barrel
(link valid for 7 days only)

[specuvestor]

Surprising that June inflation went below all expectations, down -0.4% MoM first time in 6 years, mainly from sharp 10% drop in gasoline price... which dovetailed into the note below that US seemed to suffer more from oil prices though Trump denied it.

With the Iran war continuing 3Q might not get the same reprieve as June but market like to think it's one off impact that 2027 will be normalised. US 10 year bond yield flirting with 4.6% again

Jun CPI 3.5%
Jun Core CPI 2.6%

As of 14 Jul Cleveland Fed expecting
Jul CPI 3.29%
May Core CPI 2.52%

Jun PCE 3.65%
Jun Core PCE 3.33%
Jul PCE 3.58%
Jul Core PCE 3.36%

Oil price has done better than I expected below $100 despite the hostility and false hope as OPEC+ boost production and US lifts sanctions on Russia (ironic)

But US SPR has declined to 350m barrels from 393m a month ago. At this rate in 2 months or so it will be lower than 1982 level of 250m barrels

China supposedly has >1b barrels accumulated last 5 or more years. See who blink first if Hormuz is unresolved next 3 months with US effectively ended the truce yesterday. I'm not even sure how Congress interpretes the 60 days allowance though Hegseth has mentioned the start of truce is when the strike ended so the clock can restart

Unlikely Warsh will hike rates next 3 meetings for political reasons but markets like to test new Fed chair...

May CPI 4.2%
May Core CPI 2.9%

As of 10 Jun Cleveland Fed expecting
Jun CPI 4.05%
Jun Core CPI 2.85%

May PCE 3.97%
May Core PCE 3.30%
Jun PCE 3.84%
Jun Core PCE 3.30%

[specuvestor]

US SPR has declined to less than 300m barrels. As per my 11 June post below we might see 250m barrels by end of August or maybe September, despite President Trump insisting that middle east oil impact on US is very minute

And also in my June post I think unlikely to hike rates this year even thought Dec might be a toss and PCE coming in higher than CPI.

Jul CPI 3.4%
Jul Core CPI 2.5%

As of 12 Aug Cleveland Fed expecting
Aug CPI 3.36%
Aug Core CPI 2.38%

Jul PCE 3.65%
Jul Core PCE 3.29%
Aug PCE 3.73%
Aug Core PCE 3.34%

Surprising that June inflation went below all expectations, down -0.4% MoM first time in 6 years, mainly from sharp 10% drop in gasoline price... which dovetailed into the note below that US seemed to suffer more from oil prices though Trump denied it.

With the Iran war continuing 3Q might not get the same reprieve as June but market like to think it's one off impact that 2027 will be normalised. US 10 year bond yield flirting with 4.6% again

Jun CPI 3.5%
Jun Core CPI 2.6%

As of 14 Jul Cleveland Fed expecting
Jul CPI 3.29%
May Core CPI 2.52%

Jun PCE 3.65%
Jun Core PCE 3.33%
Jul PCE 3.58%
Jul Core PCE 3.36%

Oil price has done better than I expected below $100 despite the hostility and false hope as OPEC+ boost production and US lifts sanctions on Russia (ironic)

But US SPR has declined to 350m barrels from 393m a month ago. At this rate in 2 months or so it will be lower than 1982 level of 250m barrels

China supposedly has >1b barrels accumulated last 5 or more years. See who blink first if Hormuz is unresolved next 3 months with US effectively ended the truce yesterday. I'm not even sure how Congress interpretes the 60 days allowance though Hegseth has mentioned the start of truce is when the strike ended so the clock can restart

Unlikely Warsh will hike rates next 3 meetings for political reasons but markets like to test new Fed chair...

May CPI 4.2%
May Core CPI 2.9%

As of 10 Jun Cleveland Fed expecting
Jun CPI 4.05%
Jun Core CPI 2.85%

May PCE 3.97%
May Core PCE 3.30%
Jun PCE 3.84%
Jun Core PCE 3.30%

[specuvestor]

Most of us probably don't look at it but the US bond move past 2 days has been spectacular. It will likely pressure the SGD yield curve to go up and mortgage rates to rise.

Indeed "gradually, then suddenly" I think would have been worse if Fed didn't hike rates to curb inflation. Warsh was forced his hand to face Trump's ire. I didn't think he would cut before mid-term but $100 oil did.

Weird that the equities market so sanguine as 10Y crossed 5% and the USD remains relatively strong this month

(Bloomberg) -- Yields on the US’s longest-dated bonds climbed to the highest level in more than two decades, the latest milestone in a global selloff driven by inflation fears and concern about government debt burdens.
A fresh jump in oil prices on Thursday lifted five- to 30-year Treasury yields to new multiyear highs, with the 30-year rising to levels just shy of 5.5%, the highest since 2004. Ten-year yields rose 10 basis points to 5.21%, the highest since 2007.

[swakoo]

The recent spike in US 5, 10, 30 yr treasury yields was not just due to: 

1) elevated oil prices. 
Interestingly the GCC countries (including Saudi Arabia) have been (besides using bypass oil pipelines for those who have them) using tankers to shuttle quite a lot of oil out thru the SoH for ship to ship transfers off Oman coast. And sharply reduced demand for oil from China seems to still be in play.

Other factors include:

2)  A stronger-than-expected S&P Global US purchasing managers' index (PMI) report for September. Case of good news is bad news?

3)  Mediocre investor appetite at a $70 billion auction for 5-year Treasury notes on Wednesday, followed by a similarly weak $44 billion auction for 7-year notes on Thursday.

4)  Investors are increasingly fretting over the trajectory of the US national debt, which recently topped $40 trillion.

5)  Competition for funding artificial intelligence build-outs.

Odds for rate hike in Oct have risen to roughly 70%. Just before mid-terms. Expect fireworks between Potus and Warsh?