August 5, 2019 – The yuan has fallen overnight to its lowest level against the dollar in over a decade. While that will lessen the impact to U.S. consumers from promised tariffs, it’s consequences on other financial markets is hurtful. Currency markets, left alone, balance out the strengths and weaknesses of trading partners. Tariffs and currency interventions create havoc. Markets are reacting negatively this morning for the right reasons.

Stocks finished lower on Friday as traders continue to fret over President Trump’s threat to increase tariffs on an additional $300 billion of Chinese imports by 10%. Overnight, the value of the Chinese yuan fell to a ratio of over 7 to the dollar for the first time in over a decade. As a result, …

August 5, 2019 – The yuan has fallen overnight to its lowest level against the dollar in over a decade. While that will lessen the impact to U.S. consumers from promised tariffs, it’s consequences on other financial markets is hurtful. Currency markets, left alone, balance out the strengths and weaknesses of trading partners. Tariffs and currency interventions create havoc. Markets are reacting negatively this morning for the right reasons.Read More

August 2, 2019 – The Fed lowered rates, chasing bad central bank policy in Europe and Japan. Lower rates may help the stock market over the near term, but it won’t solve the key economic issue of overcapacity. The consumer was robust before the rate cut and inflation is creeping up toward 2%. Trump’s tariff threat is simply throwing a fly into the ointment.

The Fed lowered interest rates 25-basis points on Wednesday as advertised. In the subsequent press conference, Jerome Powell confused everyone about the FOMC’s future course and stocks fell by over 1%. Then yesterday, as the yield on 10-year Treasuries fell to 1.95%, stocks started to take off once again until President Trump threatened more tariffs …

August 2, 2019 – The Fed lowered rates, chasing bad central bank policy in Europe and Japan. Lower rates may help the stock market over the near term, but it won’t solve the key economic issue of overcapacity. The consumer was robust before the rate cut and inflation is creeping up toward 2%. Trump’s tariff threat is simply throwing a fly into the ointment.Read More