from Money & Macro
Trump’s Proposed Tariffs Would Cost Families $1,700 Annually
“The scale of trade barriers proposed by candidate Trump is unprecedented.”
by Eric Boehm
Reason.com
A set of new tariffs proposed by former President Donald Trump would cost the average American family an estimated $1,700 annually—and lower-income households would be hit relatively harder, a new analysis warns.
Trump has called for a 10 percent across-the-board tariff on all imports combined with higher tariffs (potentially as high as 60 percent, he’s claimed) aimed specifically at imports from China. Together, those two policies would cost Americans about $500 billion per year, according to the Peterson Institute for International Economics (PIIE), a trade-focused think tank.
“The scale of trade barriers proposed by candidate Trump is unprecedented,” write PIIE senior fellows Kimberly Clausing and Mary E. Lovely. Thanks to the past several years of higher tariffs under both Trump and President Joe Biden, there is ample empirical evidence about the impact of tariffs, they add.
Target Struggles as Inflation Squeezes Shoppers’ Wallets
by John Carney
Breitbart.com
Target missed its mark in the first quarter of this year.
The company is feeling the pinch as high prices on essentials keep consumers’ wallets tight. The Minneapolis-based retailer reported another tough quarter, with revenue and profits falling short of expectations.
Target’s comparable sales, which include stores and digital channels open for at least a year, dropped 3.7 percent in the three months ending May 4, marking the fourth consecutive quarter of decline. Revenue fell 3.1 percent to $24.53 billion, just above Wall Street’s forecast of $24.52 billion. Net income was $942 million, or $2.03 per share, slightly missing analysts’ projections by three cents, according to the Wall Street Journal.
The Growing Threat of Inflation On Middle-Class Americans with Ted Thatcher
from Kerry Lutz's Financial Survival Network
Kerry and Ted Thatcher discussed the concept of “sticky” inflation and its impact on Fed policy. They analyzed the transition from transitory to sticky inflation and the evolving methodologies for calculating inflation. The conversation also touched on the political pressure on the Fed to cut rates, the widening gap between Wall Street and Main Street, and the potential challenges for the average American if inflation continues to rise while job growth slows. They also explored the likelihood of a market “melt up” and the potential consequences for the banking sector. Overall, the meeting provided a nuanced exploration of the complex economic landscape.
Click Here to Listen to the Audio
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McDonald’s $5 Value Meal in Trouble
Fast-food businesses are trying to battle inflation and other hurdles.
by Douglas A. McIntyre
24/7 Wall Street
Faced with a customer base that believes inflation has made its food too expensive, McDonald’s Corp. (NYSE: MCD) has announced a $5 value meal to offset the perception. The $5 menu includes a McChicken or McDouble, four-piece chicken nuggets, fries, and a drink. Just as the program launched, McDonald’s franchisees said it was too expensive for them to support it, which puts the program in jeopardy.
[…] A large group of franchisees represented by the National Owners Association wrote in a letter to its membership, “The fact remains that in order to provide the consumer with more affordable options, they must be affordable for the owner/operators. McDonald’s vast resources and financial investment are essential to any sustainable affordable strategy.” In other words, these owners say that they do not want to make McDonald’s more successful using their bank accounts.
High Inflation Made Finances Worse For 65% of Americans Last Year
by Alicia Wallace
CNN
Inflation may have slowed last year, but it continued to deal heavy blows — some devastating — on Americans’ livelihoods: Nearly two-thirds of US adults were worse off because of it, and roughly 1 in 6 couldn’t pay all their monthly bills, new Federal Reserve data shows.
The Fed on Tuesday released its Economic Well-Being of US Households report for 2023, examining the financial lives of US adults and their families. The report found that 72% of adults surveyed said they were “doing okay” financially. That’s a tick lower than last year but well below the high of 78% hit in 2021 (and still above the record low of 62% in 2013).
Inflation made the financial lives “worse” for 65% of US households, according to the report. Among those, 19% said it was “much worse.”
Inflation Has Left Me Unsure: What’s Overpriced and What’s Just ‘Normal’?
I’ve come to assume whatever I buy will fall into the nebulous “more expensive than I expected” range.
by Jim Geraghty
Washington Post
My sense of what things ought to cost is stuck in pre-pandemic 2019 or so. I suspect I’m far from alone. This means every time I make our family’s midweek run to Trader Joe’s — breaking news, two teenagers eat a lot — the bag of groceries isn’t just going to cost more than I want it to. There’s a good chance it’s also going to cost a few bucks more than I remember it being last time.
Or will it? Given the nation’s inflation bender over the past few years, I’ve come to assume the prices for just about everything are going to be some nebulous “more expensive than I expected” range. Which means I no longer have a good sense of what’s a new post-high-inflation normal cost and what’s genuinely overpriced.
Carney On Kudlow: ‘They Can’t Say It with a Straight Face’ – Biden Blames Corporate Greed for Inflation But It’s Just Not True
by Pam Key
Breitbart.com
Breitbart News economics editor John Carney said Tuesday on Fox Business Network’s “Kudlow” that it was incorrect for President Joe Biden to blame corporate greed for inflation.
Host Larry Kudlow said, “They blame business for inflation. Business is to blame for evil, greedy, raising prices, not paying their fair share of taxes and generally being bad citizens.”
Carney said, “You know they had to write it in a memo because they can’t say it with a straight face, it is just not true. This idea that there was a greed surge that happened when Biden got elected first of all, if that is true we should vote him out of office, he made everybody greedier. But it is not true. It is not what is driving things.”
Dedollarization is Picking Up Steam
Bond market auctions are rigged to always deliver a near-perfect 2.4 bid-to-cover ratio. Why does this matter to you? Because rigged markets always fail spectacularly. This time, with a Great Taking waiting in the wings…
by Dr. Chris Martenson
Chris Martenson’s Peak Prosperity
The signals from gold and silver and copper are loudly clanging away. Most have not yet caught on, but they will.
Dedollarization is underway and picking up steam.
Remember; slowly, then all at once.
That’s how these things tend to go. We’re in the quickening phase. Soon the too-fast-to-follow phase.
Then the dust settles and we all glance around to find out how well prepared we were. None of us as much as we’d like, I’d wager.
Bidenomics is the Beginning of the End for the U.S. Economy
by Michael Snyder
The Economic Collapse Blog
I have a great idea. Let’s wildly print money, let’s systematically destroy the reserve currency of the globe, let’s add a trillion dollars to the national debt every 100 days, let’s strangle the economy with all sorts of ridiculous regulations, let’s dramatically hike interest rates, let’s make things exceedingly difficult for our domestic energy industry, and let’s allow theft, violence, homelessness and migration to run wild. Then we’ll sit back and see what happens. What I have just described is essentially what we have witnessed over the last three years. Joe Biden and others in positions of power in Washington are running our economy into the ground. The system really is coming apart at the seams, and Bidenomics really is the beginning of the end for the U.S. economy.
Former Chrysler and Home Depot CEO Bob Nardelli is also sounding the alarm about the severe damage that Bidenomics is doing.
Fed’s Barr: Inflation Data ‘Disappointing,’ Tight Policy Needs More Time
by Howard Schneider
Yahoo! Finance
“Inflation readings in the first quarter of this year were disappointing. These results did not provide me with the increased confidence that I was hoping to find to support easing monetary policy,” Barr said in remarks prepared for delivery at an Atlanta Federal Reserve conference on financial markets.
RBA Resumes Rate-Hike Discussion On Renewed Inflation Concerns
by Swati Pandey
BNN Bloomberg
(Bloomberg) — Australia’s central bank resumed a discussion of interest-rate hikes at its May policy meeting before deciding that the case to stand pat was stronger as it aims to avoid “excessive fine tuning.”
Minutes of the Reserve Bank’s May 6-7 gathering showed the board discussed two options when it left the key rate at 4.35%, noting the risks around its economic forecasts were still “balanced” despite stronger-than-expected data in the run-up to the meeting.
The board “seems focused on looking through the ‘short-term variation in inflation to avoid excessive fine-tuning’,” said Belinda Allen, an economist at Commonwealth Bank of Australia. “As a result the hurdle to hike again seems high and instead the risks sit to a later start to the easing cycle than our base case” of November.