US Economy

As Australia continues to shed its industrial base, the US is rebuilding.

Three weeks ago, the Chinese government and the Trump administration came to a very rough agreement on trade, tariffs, and the supply of vital materials each side respectively controlled.

Below is a fascinating note from Goldman on US tariffs. The domestic corporate goods price index (CGPI) fell -0.2% mom in May, the first decline since August last year, due to lower gasoline prices. In yoy terms, the index decelerated sharply to +3.2% (April: +4.1%).

If there is one thing that MAGA hates, it’s neocons.

Peter Hartcher is freaking out.

Unlike some economists, I believe that tariffs can be a useful tool in protecting strategic industries to keep alive certain capacities that are essential to the freestanding nature of any self-sustaining society.

So far as I can tell, Treasury Secretary Scott Bessent is the greatest thing going for the Trump administration by far.

President Trump’s 10% tariff on Australia never made sense. Australia has historically had a gaping trade deficit with the United States. As illustrated in the table below from Australia’s Department of Foreign Affairs and Trade (DFAT), the United States exported (A$88.2b) more than double what it imported (A$37.5b) from Australia in 2023-24.

In the report below, Luke Yeaman, Chief Economist at CBA, examines whether the era of globalisation over. Trump, Tariffs and Trade: A Different Kind of Wall The era of trade liberalisation, free market reforms, deregulation and fiscal discipline (the Washington Consensus) is officially dead and buried.

The Market Ear on the extreme bear. Equities S&P 500 decline has been more severe than the median bear market at this point in a sell-off. Source: Morgan Stanley 9th worst Weekly performance for the S&P 500 since WWII – last week’s decline (-9.1%) was the 9th worst.

Australia has traditionally had a gaping trade deficit with the United States. The following table from Australia’s Department of Foreign Affairs and Trade (DFAT) shows that the United States exported (A$88.2b) more than double what it imported (A$37.5b) from Australia in 2023-24.

Terrific video here on how Trump’s tariffs are aimed at working while the fallout is in the implementation.

Let us begin with AEP in full flight.

BofA is pretty good at US inflation and January does tend towards stronger numbers. Core inflation should pick up in January We forecast core CPI inflation of 0.3% m/m (0.33% ungrounded) for January.

It’s a very big debate for asset allocators by very big people that I respect on both sides.

I never bet on employment reports.

Goldman with the note.

Goldman with the note.

Here it is.

Goldman with the note.

Goldman with the note.

Deutsche with an excellent wrap. 1. Free trade agreements (FTAs) are not safe.