from ABC 7 News – WJLA
The EU Wants to Cynically Use War for Debt Bonanza
by Finn Andreen
Mises.org
The European political and financial elite knows that the war in Ukraine is lost but wants to use it as an opportunity to reach strategic independence from the United States. As the future chancellor of Germany Friedrich Merz said right after his electoral win on Feb 23: “It will be an absolute priority for me to strengthen Europe as soon as possible so much that it gradually really achieves independence from the United States.”
Such strategic independence needs money and investment—a lot of it—not only to boost defense but much else, like energy and innovation; areas in which Europe is lagging behind the US and China. In order to have the pretext to implement this spending plan, the idea among the EU elite is to make sure that the war in Ukraine does not end too quickly. That way the conflict can be used to justify artificially injecting much needed money into the moribund EU economies.
Secretary Bessent: Treasury Department Appointing ‘Affordability Czar’
by Pam Key
Breitbart.com
Treasury Secretary Scott Bessent said Sunday on CBS’s “Face the Nation” that he would be appointing an “affordability czar” to tackle high prices affecting consumers.
Partial transcript as follows:
MARGARET BRENNAN: I hear you that sometimes the data lags reality, but when we are talking about people’s perceptions of the economy, it’s just how they’re feeling right now, we see in our polling, 52% of Americans say Trump’s policies are making grocery prices go up. They explicitly said that on this bar chart you see there. So it’s an experience and a perception issue. When does that shift? When we see the benefits of the planning you say is underway?
BESSENT: Look, I think President Trump said that he’ll own the economy in six or 12 months, but I can tell you that we are working to get these prices down every day, but it took four years to get us here, and we’ve had five weeks so interest rates are down.
Tariff Wars, Stagflation and Fiat Money
from King World News
Here is a look at tariff wars, stagflation and fiat money.
March 4 (King World News) – Peter Boockvar: I’m sure you’ll be seeing these stats all day but will mention it here just in case. In 2024, the US imported about $413b worth of goods from Canada, $505b from Mexico and $440b from China, including iphones. From what I’ve seen so far, in terms of retaliation against the US, it looks like the American farmer has been specifically targeted again with tariffs on US soybeans, sorghum, pork, beef, chicken, wheat, corn and cotton too by China.
The US farmer by the way also imports about 85% of their potash needs from Canada which just got 25% more expensive. They were targeted too in the Trump 1.0 tariffs in 2018 and 2019 that led to a financial package given to them. As the US consumer still has PTSD from the 2022 inflation spike, even higher food prices are going to come quickly as they are VERY short cycle items. In three weeks, Canadian tariffs will come on its imports of US cars, trucks, steel and aluminum.
Why the Fed’s Inflation Fight Could Be a Victim of Trump’s Tariffs and Tax Cuts
Trump is moving fast and breaking things — and creating more chaos than progress
by Peter Morici
Market Watch
The Fed is holding the federal-funds rate steady while looking for signs that inflation is moving closer to 2%. The bond market, however, is betting that Trump’s policies will undercut central bank efforts.
Last fall, the Fed lowered the overnight borrowing rate 1 percentage point, but both the 2- and 10-year Treasury rates are higher. Those rates help determine interest for credit cards, auto loans and mortgages.
Tariffs Likely to Fuel Inflation ‘Relatively Soon,’ Fed’s Williams Says
Concern about U.S. import duties “is clearly influencing how people are thinking about inflation this year,” New York Federal Reserve Bank President John Williams said.
by Jim Tyson
CFO Dive
Dive Brief:
– U.S. tariffs enacted on Tuesday will likely boost prices for imported consumer goods fairly soon, while prices for U.S. manufactured products made with imported goods will rise more gradually, New York Federal Reserve Bank President John Williams predicted.
– “Tariffs on consumer goods, especially, they do feed into import prices pretty strongly — that does filter into prices consumers pay — that happens relatively soon,” Williams said. “Tariffs that feed into the kind of intermediate inputs,” he said, “tend to pass through more gradually and maybe last a little bit longer in terms of effects.”
– Williams noted uncertainty in the outlook for U.S. trade, including the duration of tariffs and how targeted countries will respond. Interviewed during a Bloomberg webcast, he also emphasized that the “economy is starting in a good place,” with unemployment at 4% and inflation about 0.5 percentage point above the Fed’s 2% target.
Fed Looks Set to Hold Rates Steady as U.S. Inflation Slows, Markets Anticipate Cuts
Inflation in the US eased in January, but the Fed signals patience before considering interest rate cuts
by Freschia Gonzales
Wealth Professional
The latest US economic data indicates that inflation eased slightly in January, but consumer spending fell unexpectedly, raising concerns about economic momentum.
According to the US Commerce Department, the personal consumption expenditures (PCE) price index, the US Federal Reserve’s preferred inflation measure, increased by 0.3 percent for the month, bringing the annual rate to 2.5 percent.
Core PCE, which excludes food and energy, also rose by 0.3 percent in January and was up 2.6 percent year-over-year, marking a decline from December’s revised 2.9 percent.
Despite cooling inflation, US consumer spending dropped by 0.2 percent in January, the largest monthly decline since February 2021, as reported by CNN.
Republicans in Congress Turn Up Scrutiny of Fed as Inflation Persists
by Amara Omeokwe and Billy House
Yahoo! Finance
(Bloomberg) — Congressional Republicans are ramping up scrutiny of the Federal Reserve, just as the central bank confronts stubborn inflation and broader questions about its role as a bank regulator.
The opening act in the new effort will come Tuesday at the first hearing of a freshly formed House task force that will home in on the Fed. It falls the same day President Donald Trump will address Congress amid a barrage of directives expanding his authority over independent government agencies.
“We needed a particular special focus in using the task force route to look at the Federal Reserve system, literally from the charter in 1913 to present,” said Frank Lucas, an Oklahoma Republican who will chair the new panel examining the central bank’s conduct of monetary policy and bank regulation.
If Inflation is Higher Prices, How Dangerous for the Fed to Fight It
by John Tamny
Forbes
The economic consensus of the moment is that higher prices are the same as inflation, and the Fed is the only governmental entity situated to bring down higher prices. It’s a dangerous consensus. Prices are how a market economy organizes itself.
Forget for now that the Fed is not remotely capable of bending the markets to its will, and instead let’s think about what kind of tangle we’re getting ourselves into if we say inflation is higher market prices, or a higher basket of prices of the government’s choosing, only to tell the Fed to bring “inflation” down. It’s tantamount to economists and pundits ascribing to government the power to distort market signals, and by extension, the market economy. No thanks, not to mention that higher prices are not necessarily evidence of inflation as is. Please read on.
Unless economics is no longer about tradeoffs, all rising market prices pre-suppose falling prices. If you’re spending much more on eggs, by definition you have fewer dollars for other goods.
Fed Study Shows Modest Consumer Price Impact From Proposed Tariffs
by John Carney
Breitbart.com
Americans are not likely to be hit hard even if the tariffs on Mexico, Canada, and China rise significantly this week.
A new analysis from the Federal Reserve Bank of Atlanta suggests that the consumer price impact of proposed import tariffs may be smaller than commonly assumed, with much of the cost increase tied to North American trade partners rather than China. While tariffs would lead to one-time price increases on certain goods, the study finds that these effects are not the same as sustained inflation.
President Trump and administration officials have said they plan to put in place sweeping new tariffs on Tuesday. The new import duties would apply to around $1.5 trillion of goods. Goods from Mexico would get a 25 tariff trate, as would imports from Canada, except Canadian energy, which would face a 10 percent rate. Tariffs on China are set to rise by an additional 10 percent.
New York Fed’s Measure of “Inflation Persistence” Nixes Friday’s Idea that YoY PCE Inflation Cooled, Using Same Data
by Wolf Richter
Wolf Street
The game of inflation Whack-A-Mole: price pressures shifted from housing to non-housing services and core goods.
Just briefly here because it’s an interesting twist by the New York Fed on Friday’s PCE inflation reading: it nixes the idea that year-over-year PCE inflation is cooling.
Back in April 2022, when the Fed’s favored inflation measure, the PCE price index, was surging towards its June 2022 high of 7.2% year-over-year, researchers at the New York Fed came out with a new inflation measure that’s based on the data in the PCE price index, but tries to show inflation’s “persistence.” They did this by aggregating the PCE components differently. And they called it Multivariate Core Trend inflation (MCT inflation).