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Weekly Economic Report 1.17.25

With a deluge of policy changes coming on Monday – potentially a hundred executive orders – we will focus this week on where we are now, domestically and globally, to set the starting point. The good news is that the US economy continues to perform exceptionally well. The bad news is that the rest of the world remains in a deep manufacturing- oriented funk. That global malaise is aggravated by the fact that Trump’s first wave policy changes will likely contain broad tariffs hitting virtually all global manufacturing. We see both the recent rise in the dollar and the rise in CPI for commodities (goods) as businesses adjusting for what they expect to come. They must -- given their current weakened state and the size of the coming tax increase. Meanwhile, US financial markets continue to imply that the US will absorb the shock of higher goods prices without much trouble. The hefty asset appreciation over the past two years has insulated the top 75% of US consumer spending power from concern about inflation or volatility in incomes.


















































































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