One Trump Victory: Companies Rethink China

The trade war between China and the U.S. is close to a resolution, but other countries are beginning to decrease their need for Chinese factory goods, due to tariffs and trade tensions, and in order to “diversify” their supply chains. Many see the dependence of the U.S. on Chinese products as something that could create vulnerability in the future, like the idea of decoupling. It mentioned that China may not oppose decoupling due to the inability to end “low-skilled, polluting manufacturing jobs and move higher up in the value chain.” The article also gave an overview of China’s rise in manufacturing development over the past two decades. China now seeks to focus on high-tech and innovative industries, but is aware that if their economy slows, it could lead to instability or job losses. A 2018 UBS survey of chief financial officers at export-oriented manufacturers in China found that about a third had at least shifted some production out of China and that this year another third has been predicted to do so again. Many companies outside of China are shifting their production to the United States. Even Hasbro, a large producer of toys, has a plan “to be 60 percent out of China” by next year and hopes to move much of its’ production to the U.S. Despite the U.S. and China on the verge of ending the trade war, these shifts have already begun, and it will be interesting to see the repercussions, if any, China will have to deal with.

https://www.nytimes.com/2019/04/05/business/china-trade-trump-jobs-decoupling.html

House Committee Passes Legislation to Improve Retirement Security

This week the House Ways and Means Committee UNANIMOUSLY passed the Secure Act which will make it easier for Small Employers to set-up 401(k)s for their employees.  The bill offers various incentives to firms to expand 401(k) access and to pay for part-time employee retirement benefits.  Congress is doing this to combat a retirement crisis in America.  "Americans currently face a retirement income crisis, with too many people in danger of not having enough in retirement to maintain their standard of living and avoid sliding into poverty" according to Richard Neal Democratic Representative from Massachusetts and Committee Chairman.  The bill would also repeal the maximum age that contributions could be made to IRAs.    The plan would also raise the age to mandatory withdrawals to 72 from its present 70 1/2.    The bill would also expand savings in 529 plans from just college related expenses to include home schooling expenses as well as to help pay for student loans.

https://www.cnbc.com/2019/04/02/house-committee-passes-secure-act-for-401k-plans-amid-retirement-income-crisis.html      

There are Plenty of Jobs, But No One to Fill Them

Throughout the start of 2019, many Economists were worried about a potential recession and predicted that a downturn was on the horizon. However as we have gotten farther into the year, the economy continues to push forward adding lots of jobs each month. In just March alone almost 200,000 nonfarming jobs were added to the market. The slow growth rates in the economy may not be from lower consumption but rather from firms not being able to get jobs filled as the labor market doesn't have the skill set yet to fill them.
Many Americans who are "qualified" to work somewhere have been struggling to find jobs in their field, as today it often requires additional education or training in order to stay relevant in a particular industry. The slow rate at which some new jobs are getting filled points to a skills gap in the labor force, particularly with the older generations. Now more than ever, firms are trying to incentivize workers to stay at their companies using things like wage increases, benefits packages, and more flexible work hours frequently rather than trying to search through the labor force with the hopes of finding someone who meets their very specific demands.
Moving forward, I am interested to see how the labor market looks throughout the rest of the year and what ties to has to the status of the economy.

SOURCE: https://www.cnbc.com/2019/04/05/americas-bustling-jobs-market-is-still-leaving-some-people-behind.html

Fed Officials Resist Rate-Cut Idea Pushed by Trump's Advisers

This Bloomberg article by Christopher Condon details the reactions of Federal Reserve officials to the president’s urging of cutting interest rates. While the Fed is currently holding the current rate given the global economic slowdown of the past few months, their patient approach has been under scrutiny by some. President Trump’s rationale of imposing an expansionary monetary policy is a response to the US’s recent slowing in growth and is meant to encourage consumer spending and business investments to prolong expansion for as long as possible. The Fed’s reasoning within this article is vague, but their overall intent for raising interest rates is related to our low inflation and trade deficit. By raising interest rates through open market operations, the Fed is looking to make US investments more appealing to foreign investors by offering better rates of return. Nevertheless, they intend to hold rates steady for the foreseeable future, as mentioned by several previous blog posts. Overall, Federal Reserve officials are content with what their current course of action is, despite presidential pushback.
    Personally, I think the Fed’s determination in keeping a patient approach is a somewhat comforting notion. Recent overall interest rates are historically still relatively low. In order for the Fed to maintain any effectiveness of monetary policy they implement, rates have to increase at some point in order to be decreased in the future for expansionary action. Further lowering of already modest interest rates appears to be a futile attempt at furthering US growth.

https://www.bloomberg.com/news/articles/2019-04-04/fed-s-mester-says-it-s-possible-rate-hiking-cycle-may-be-over?srnd=markets-vp

Brexit deadlocked again: British parliament fails to find an alternative

The Brexit deal has been rejected three times and there currently is no other deal agreed with the European Union. Parliament failed to find a majority against any separation deal. The direction of Brexit continues to be up in the air. In response to the rejection, the lawmakers tried to pass four last minute alternative Brexit options, all  of which were defeated. The only option that came close was keeping Britain in a Customs Union with the EU, however it was defeated by three votes.

Brexit minister Steven Barclay said that the default position was still that Britain would leave the EU on April 12^th without a deal. Barclay explained that Britain could try and put their deal up for a fourth vote and hope that it passes -- otherwise it will be a nightmare for many international businesses. Due to the stall in the Brexit the sterling fell almost 1 percent, which is already showing negative effects.

Source: https://www.cnbc.com/2019/04/01/alternatives-to-mays-brexit-deal-fail-to-find-majority-in-parliament.html

Trump says Fed should Cut Rates and Lift Economy

President Trump has called on the fed to cut interest rates to stimulate the economic growth and because there is not inflation. He has stated several times that this has slowed down the economy.He also stated that they should get rid of quantitative tightening. He has now put his efforts to try to build allies and at the Fed. Trump blames the Feds for economic growth falling short of the 4 percent annual rate last year. Despite that, the labor department reported employers adding 196,000 jobs last month. The trade war has begun to hurt some American Industries, and growth in China.

https://www.nytimes.com/2019/04/05/business/economy/trump-fed-interest-rates.html

World trade

World trade shrunk by 0.3% in the fourth quarter of 2018 , the forecast for 2019 is much lower than what was expected. World trade  has been weighed down by new tariffs and retaliatory measures, weaker economic growth, volatility in financial markets and tighter monetary conditions in developed countries. It will be interesting to see what effect the trade war between the united states and china will have on global trade as well if the UK decides to leave the EU could have significant impact on world trade. All in all it seems like the global economy is slowing down and i'm curious what impact this will have here at home.




https://www.cnbc.com/2019/04/02/wto-lowers-its-forecasts-after-global-trade-slowed-in-the-fourth-quarter.html

US weekly jobless claims drop to the lowest level since 1969

Article: https://www.cnbc.com/2019/04/04/weekly-jobless-claims.html

Despite predicted economic slowdowns for the US, as well as the rest of the world, the number of US citizens filing for unemployment benefits has dropped to an almost 50 year low. This seems to demonstrate a strong, sustained labor market. According to the Labor Department, state unemployment benefits "declined 10,000 to a seasonally adjusted 202,000 for the week ended March 30, the lowest level since early December 1969".

Possibly due to this drop in unemployment benefits, companies are experiencing a labor shortage which has attributed to a slow down in job growth. However, the pace that jobs are growing is sufficient to accommodate the increase in the working age population which has been able to keep the unemployment rate down.

It will be intriguing to see how unemployment benefits and job growth will be affected as the world continues toward an economic slowdown. And if, however, we have already reached, or even passed, the peak of our growth, how will we continue to grow without first going backward?

Gender pay gap in the UK, USA, and at OWU

Manufacturing Activity Rebounds in March

According to CNBC, the manufacturing activity, specifically through the ISM manufacturing index has rebounded more than expected in the month of March. In February, the index changed from 55.3 to 54.2. This was marked the lowest that the manufacturing index has seen since the low point of 2016. The readings that are indicated below 50 represent a contraction within the ISM index. This month in March, the index has ticked back up to 55.8, which has increases a lot more than a lot of analysts could have predicted.

In addition to the manufacturing index increasing through the month of March, the construction industry has also hit a 9-month high in spending. The strong gains even with the sluggish housing market and expensive building materials are a good sign for the economy. Hopefully, they can continue to find work within the construction industry and help the housing market get out of this drought that we are currently in. It will be interesting to see what happens in the next coming months to see if this continues.


Source: https://www.cnbc.com/2019/04/01/ism-.html

Trump Turns U.S. Policy in Central America on Its Head

President Trump announced recently that he plans to cut off aid to Guatemala, Honduras, and El Salvador. This will be 450 million in aid that these countries will no longer be receiving from the US. Trump’s reasoning behind this act was that these countries are not doing anything to stop the immigration flood into the United States. His reasoning is also backed by the theory that the best way to halt migration is to go to the root causes; however, many say that cutting off aid will actually make the issue worse. What should be happening in these countries are efforts to reduce violence, corruption, and help economic development. These positive changes will help stop immigration into the US and result in people wanting to stay in their home countries. But with these aid cuts, many US-backed programs that help fight against gangs and violence will be halted. Although legislation has a chance to fight this policy, there is a high chance that their aid will be cut completely for now and be reduced in the future. 

Personally, I don’t believe completely cutting aid is the right response to this situation. I think we do need to do our research and be sure that our aid is not funding a corrupt government, but to cut aid completely seems like an overreaction. It makes sense that helping to support more economic development and peace within these countries would lead to fewer people trying to leave and I think that is something we should strive for when looking to help these countries and reduce immigration. It will be interesting to see what the actual result of this policy is. 

Link: https://www.nytimes.com/2019/03/30/world/americas/trump-turns-us-policy-in-central-america-on-its-head.html

The new minimum wage is killing NYC’s once-thriving restaurant scene

According to the article, New York City restaurants are reducing jobs and raising prices due to the new hourly wage of $15 per hour. The executive director of the trade group also said there has been a loss of job of 1.6%. The restaurants said they have been reducing jobs and the hours of employees in 2018 and may make more adjustments in 2019 as well, which is naturally what they are assumed to do. This may get workers earn more money, but if the restaurants are raising the price, their cost of living would rise anyway. I think this will lead to reduced demands on restaurants and increase jobs and work hour loss more.

However the article seems to overstate the impact by using the word "killing", because it might not lead to major issues. But what I think of this $15 wage increase is it might not really benefit the people that work. Initially it might, but the reduced hours might negatively affect them. That depends on how the employer would adjust the times, but it will definitely reduce potential income.


https://nypost.com/2019/03/30/the-new-minimum-wage-is-killing-nycs-once-thriving-restaurant-scene/

China pledges to expand financial market opening as U.S trade delegation arrives

The trade war between the US and China has been a major headline the past several months as the United States placed heavy tariffs on hundreds of billions of dollars’ worth of Chinese imports last year to force change within the Chinese economy. In response, Beijing retaliated with tariffs on U.S goods. Recently, China has pledged to sharply expand market access for foreign banks and securities and insurance companies, especially in its financial services sector. Chinese Premier Li Keqiang also mentioned that the Chinese governments will also work on more favorable policies for foreign investors to trade Chinese bonds. Increased access to financial services markets was one of the U.S demands for change from Beijing on trade policies. As U.S officials arrive in Beijing for trade talks, an offer from China to allow U.S cloud computing companies access to China’s fast-growing market thought special Chinese free trade zones. According to sources, the two countries have made progress in all areas under discussion. As progress is made, the U.S may drop some tariffs if a trade deal is met, however they are not going to give up any leverage. Li mentioned the possibility of fluctuations in the Chinese economy but is confident that early policy steps were gaining traction. Chinas economic growth cooled to 6.6% last year, which is the slowest pace in nearly 30 years. If a trade deal is made, it will be interesting to look at the impact is has on the global economy as well as individual sectors.

https://www.reuters.com/article/us-china-boao/china-pledges-to-expand-financial-market-opening-as-u-s-trade-delegation-arrives-idUSKCN1R9076

US Consumer Confidence weakens in March

This article continuously references the volatile stock market and how that has effected overall consumer confidence. The index fell from 131.4 to 124.1 in February.

The main point in this article is that the volatility of the stock market has basically been matched by the consumer confidence index over recent months. With the huge stock market drop in December of 2018 we saw one of the first drops in consumer confidence in Trumps administration. In the times we are in now, aka good economic conditions, full employment, and growing markets, any hiccup in the system can raise large concerns. Another reason, is because the US economy has been prospering for many years now, so again that hiccup can really make people think if a slowdown is among us.

Going forward, any future stock market correction should lead to even more doubt. Although, when times are good no one wants to be the one to think the market is going to fall soon. As basically all of our recessions have shown.

From my feeble point of view, we do not have a systemic issue like CDO/MBS of 2008 which would only magnify a recession. If the market truly is over valued and we need to slow down a bit for future growth, then so be it, lets just hope the FED and administration prepare for it.



https://www.cnbc.com/2019/03/26/us-consumer-confidence-weakens-in-march.html

Stocks Fall as Bond Market Flashes a Recession Warning

On Friday March 23rd the treasury bond yield curve inverted signaling fear across the bond market.  This comes after the FED's rate change decision two days prior to halt rate hikes.  An inversion occurs when yield from long term bonds is smaller than short term ones.  While the article points out that there are several ways to represent and measure the yield curve and not all have inverted, like the two and 10 year treasury notes.  While a inverted yield curve has preceded every large economic downturn there is not a causal relation.  Several times the yield curve has inverted without a recession following within the next year.  However the inversion on Friday resulted in a fears of a coming recession and composite indexes, The S&P fell 190 basis points while the Nasdaq fell 250.



https://www.nytimes.com/2019/03/22/business/yield-curve-inverted-recession.html

Boeing's 737 Max and the US GDP

Since two of their 737 Max planes have crashed in the last six months, deliveries from aircraft giant Boeing have come to a stop while an investigation happens. However, this hasn't stopped them from producing the planes themselves as they continue to be completed and kept in an inventory for when the investigation is over and they hopefully will be able to re-release the planes. However, concerns that the US GDP could fall by more than half a percent have risen as people are starting to worry that Boeing may ultimately have to shut down production as this investigation drags out. As the Boeing 747 Max model accounted for almost one-quarter of total aircraft production in the country, it's still somewhat surprising to see the projected impact that just one company can have on the US economy. But, as it has been mentioned, they are still continuing to produce and store the planes so GDP should remain unaffected by them unless they are ultimately told or come to the decision to stop making the aircraft for whatever reason.

It should be noted that a halt in production isn't totally out of the picture. Shares of Boeing have fallen almost 11 percent as of Thursday, March 21st. The company also has coordinated to slow down production of the plane and focus on older incomplete work in the coming weeks to try and use their resources efficiently somewhere else during this time.

SOURCE: https://www.cnbc.com/2019/03/21/boeings-737-max-could-hit-us-gdp-if-production-is-halted-jp-morgan.html

Markets drop sharply as fears of global slowdown intensify

Thanks in part to fears over Brexit but more so "faltering demand for exports amid the US-China trade dispute," eurozone factory productivity has fallen more quickly than ever in the last six years and the world is seeing a sharp drop in financial markets. The expectations of a surge of growth following the somewhat less-than-spectacular end to 2018 seem to be less realistic now than they were before, according to the Guardian. The Dow Jones Industrial closed on Friday down 1.8% and the FTSE 100 down 2.0%. Across the rest of Europe, markets did not fare well - Germany's manufacturing output recorded the steepest decline in seven years. According to the article, this is due to China's slowing economy and President Trump's import tariffs on Chinese goods. China is, of course, Germany's biggest export market for car manufacturers. The final note of the article is that the PMI index showed Germany and France as the two worst performers at the moment, with the rest of the eurozone growing well enough.

Article:
https://www.theguardian.com/business/2019/mar/22/eurozone-suffers-sharp-decline-manufacturing-activity

Did the economy really grow 3%?

American spending on services slowed in the fourth quarter. This had effect on the downturn of Gross Domestic Product. The Bureau of Econonic Analysis said GDP grew by 2.6% in the fourth quarter but that was based on incomplete data. Following the data J.P. Morgan Lowered their fourth quarter results. Trumps administration cites they have lifted the US economy by their policies. BEA had 4Q-to4Q as 3.1% while private forecasters have it just below that mark.

https://www.google.com/amp/s/www.wsj.com/amp/articles/BL-REB-39342%3fresponsive=y

Japanese economy downgraded amid China slowdown

The government downgraded their assessment of the Japanese economy do to slower exports to China. This is the first time the economy's outlook has been downgraded since March of 2016. Consumption and capital expenditures make up 70% of GDP according to government officials. Their most recent growth phase, the Izanami Boom, may have been surpassed by the most recent boom from 2012 to now. A seven-member panel of private-sector and academics are responsible for determining the length of economic cycle, and their process takes longer than a year. They claim exports have had a "weak tone" but private consumption is increasing.

https://www.japantimes.co.jp/news/2019/03/20/business/economy-business/government-downgrades-view-japanese-economy-first-time-three-years-amid-china-slowdown/#.XJhJYChKg2w

The distribution of wealth in the United States and implications for a net worth tax

Wealth inequality in the United States is high and has increased sharply in recent decades. Taxes on wealth are a natural policy instrument to address wealth inequality and could raise substantial revenue while shoring up structural weaknesses in the current income tax system. A net worth tax is an annual tax imposed on an individual or family's wealth, or net worth. Wealth is distributed in a highly unequal fashion, with the wealthiest 1 percent of families in the United States holding about 40 percent of all wealth and the bottom 90 percent of families holding less than one-quarter of all wealth. The high level of wealth inequality in the United States also is reflected in the substantial difference between median wealth ($97,000) and mean wealth ($690,000). As a result, 84 percent of families have wealth below the mean. The highly skewed distribution of wealth is one of the primary reasons the burden of a net worth tax would be highly progressive. Net worth taxes typically apply only to the relatively wealthy or extremely wealthy and exempt the rest of the population. The patterns of wealth inequality among the entire population shown above are mirrored among the wealthy. Families with $1 million of wealth or more are older, more likely to be white, and more likely to have a 4-year college degree than the population as a whole. Low-wealth and high-wealth families differ in terms of the assets and liabilities they hold. Cars and other vehicles account for the overwhelming majority of wealth for low-wealth families. Middle-wealth families hold much more of their wealth in home equity, with more modest contributions from retirement accounts, bank accounts, and cars. Very high-wealth families hold much more of their wealth in business equity and financial assets outside retirement accounts.

https://equitablegrowth.org/the-distribution-of-wealth-in-the-united-states-and-implications-for-a-net-worth-tax/

Mueller Doesn't Find Trump Campaign Conspired With Russia

Special counsel Robert Mueller concluded that President Trump and his campaign did not conspire or coordinate with Russia to interfere in the 2016 election. Mueller did  not draw a conclusion on whether Trump obstructed justice as the final report neither finds that the president committed a crime nor exonerated him. Its going to be hard to find evidence that Trump actually obstructed justice.  This announcement brings an end to the investigation that lasted almost two years. The special counsel said that, "members of the Trump campaign conspired or coordinated with the Russia government in its election interference activities. This report removes a legal threat and presents a political win for Trump and his allies.

To me this is kind of ridiculous. No matter how strongly anyone feels about Trump as a person or about his policies, it is crazy that the opposing side will do anything to slander or demean this man in any way. People may believe in what Trump stands for or absolutely hate him, but I find it very interesting that people try and undermine him in every aspect. He is the president of the United States which is the pinnacle of political power. People try to chop him down and make up stories about him which brings focus to all of his negative qualities. The president has always been a highly scrutinized position no matter who is in office but I doubt there has been a more focused and tactical effort by those in opposition of him to slander the reputation of the president.

https://www.wsj.com/articles/top-findings-from-muellers-report-to-be-sent-to-congress-within-the-hour-11553454918

Ford is cutting 5,000 jobs in Germany with more cuts coming for the UK

Ford in an effort to reduce costs in Europe is cutting 5,000 jobs in Germany and more in the UK. The company offered voluntary separation packages for the employees in Germany and the UK to help improve their performance in the region. Ford is trying to reshape its business in Europe to focus on commercial vehicles, passenger vehicles, and imports. They are trying to focus on the most profitable vehicles, and is even trying to partner with Volkswagen to increase the market around the world.

I think it would be interesting to see how partnering with Volkswagen would work, for both companies may have different ideas on how to increase the markets around the world leading to many conflicting ideas. It would also be interesting to see how the Germany and UK workers would react to the high amount of people being cut. 

Source: https://www.cnbc.com/2019/03/15/ford-is-cutting-5000-jobs-in-germany-with-more-cuts-coming-for-the-uk.html

Pakistan Call for Peace with India

Since their last war in 1971, India and Pakistan have lived in peace. However, controversy started last month when 40 paramilitary police were killed in the Kashmir region of India. The attack was claimed by a Pakistan-based militant group. On Feb 26 India retaliated with a jet raid of a militant camp in Pakistan. The next day on Feb 27, Pakistan shot down an Indian aircraft and captured the pilot after he ejected from the plane. However, as a sign of peace, Pakistan released custody of the pilot.

This past Saturday, Pakistan held a parade to show off its military power. Pakistan's president, Arif Alvi commented on the purpose of the parade stating, "Today's parade is sending the message that we are a peaceful people but we will never be oblivious of our defense." President Alvi has also released multiple statements making it very clear that war is not sensible and this dispute should be settled through communication.

I agree with president Alvi in the sense that war would be an inappropriate outcome for this dispute. If these two nations went to war this would obviously have an impact on many economies around the world. Many countries would have to get involved especially with threats of nuclear warfare. Hopefully we have seen the end of these violent attacks and peace can quickly be restored to these neighboring nations.

Link: https://www.reuters.com/article/us-pakistan-republicday/pakistan-call-for-peace-with-india-as-it-shows-off-its-military-might-idUSKCN1R409T

Defying Allies, Italy Signs On to New Silk Road With China

Despite warnings from its European allies as well as America, Italy has signed a deal with China which progresses the development of China's New Silk Road. The New Silk Road is a massive worldwide infrastructure project that the Chinese are undertaking to transport Chinese goods and resources through Asia, Europe, and Africa. The deal outlined billions in euros worth of agreements between Italian and Chinese companies.

The Italian government welcomed President Xi Jinping to Rome as a close ally and said that the deal will "build a better relationship" between the two nations. Critics including the Trump administration warn against the growing Chinese influence. One key fear is that the use of Chinese 5G wireless networks developed by Huawei could lead to Beijing spying on communications. The Interior Minister himself of Italy was absent from the deal signing due to his reservations on the deal, but ultimately concluded that as long as it served Italian interests "he was satisfied."




https://www.nytimes.com/2019/03/23/world/europe/italy-china-xi-silk-road.html

Ohio Gas Tax

Over the past few weeks the State of Ohio has considered raising the tax on gas.  Originally proposed by Governor DeWine in late February to increase 18 cents per gallon in one year and then increase each year after that with inflation as a part of his transportation budget.  The proposed budget then went to the Ohio House of Representatives where the tax was lowered from an 18 cent per gallon increase to increase 7 cents per gallon this year and then 3.7 cents per gallon the year after and would not be indexed to inflation.  Then this past Friday the Ohio Senate passed a tax that only increases the gas tax by 6 cents per gallon.  The two chambers must now work out the differences between the two bills before the end of March.  This tax will now make the cost of gas higher and as such we may see that commuters seek other means of public transportation when possible.  So those going on long distance trips may not fill up as much and may choose to fly out of CMH, CVG, or Hopkins.  Those in urban areas may choose public transportation instead of driving.  We will see how this affects the transportation choices of Ohio Commuters.








https://www.cleveland.com/open/2019/03/ohio-senate-passes-6-cents-a-gallon-gas-tax-increase.html

Global growth rebound hopes hit by weak factory data

In this article trade tensions were targeted as affecting factory outputs from manufacturers in Europe, Japan, and the United States. March surveys showed that this “setback” is not beneficial to the overall slowdown of the global economy. In Europe, factory activity contracted at the fastest pace in six years throughout the 19-country euro zone, Japans’ manufacturing output declined the most in three years, and in the U.S., manufacturing was at its’ smallest since June 2017 along with the 10-year Treasury note yield in New York reducing to a 14-month low. On Friday, U.S. stocks, European shares, and the euro all fell as well.

Global trade tensions are being pointed to as the root cause of these events. The article also mentioned that the “spillovers” from events in Europe, the problems in Italy and with Brexit, create an “uncertainty” that needs to be considered if countries seek to end the slow global growth. China’s economic slowdown, another external factor, is a large cause of the global economic slowdown. It most notably affects Japan for they also are hit by the trade tensions between China and the U.S., due to many of their outputs being shipped to China who then sends them as finished goods to the U.S.

At the end of 2018, the euro zone was at its’ slowest economic growth pace in four years at 0.2 percent. The European Central Bank has decided to “offer banks a new round of cheap loans,” in the hopes that this will help the economy. Other solutions could come from the trade discussions next week between China and the United States. I am curious to see if the talks can really bring an end to the trade war that is contributing to the slowdown of global growth of many nations.

https://www.reuters.com/article/us-economy-global/global-growth-rebound-hopes-hit-by-weak-factory-data-idUSKCN1R32AX

UK Inflation Unexpectedly Accelerates For First Time In 6 Months

Throughout this article, the recent unexpected changes various UK inflation levels are summarized. More specifically, the CPI rose 1.9% year-on-year, after a rise of 1.8% from January of this year. Given that the inflation rate was expected to remain at its previous level, the article speculates that February's food, alcohol, and tobacco price hikes contributed to this unexpected increase. Core inflation rate was shown to slow to 1.8% from 1.9 the moth prior, which was also not anticipated. The article also mentions that the UK house price inflation decreased to 1.7%, making it the weakest rate since June 2013.

While this article does not explore possible causes and effects in detail, the unexpected nature of these statistics still fell within acceptable ranges. These general overall price level increases have unsurprisingly led to decreased sales of the affected products. Specifically regarding food, a no-deal Brexit’s possible effects on perishable goods will most likely include another price hike. It will certainly be interesting to see how these nations and their economies will continue to change within the next coming months, for a variety of reasons.

https://www.rttnews.com/story.aspx?Id=2987603

U.S. Treasury Yield Curve Inverts for the First Time Since 2007

On March 22, 2019, the US Treasury yield curve inverted for the first time since 2007. "The gap between the 3-month and 10-year yields vanished as a surge of buying pushed the latter to a 14-month low of 2.416 percent. Inversion is considered a reliable harbinger of a recession in the U.S., within roughly the next 18 months". The short-term interest rates exceeded the long-term interest rates on Friday. 

Historically, an inverted yield curve has been viewed as an indicator of a pending economic recession. When short-term interest rates exceed long-term rates, market sentiment suggests that the long-term outlook is poor and that the yields offered by long-term fixed income will continue to fall. Is this finally a trigger for a recession coming? Unemployment rates have been relatively low, high GDP, high earnings, etc. Are we on the cusp of the business cycle and looking to head downwards? How will this invert impact the economy?

https://www.bloomberg.com/news/articles/2019-03-22/u-s-treasury-yield-curve-inverts-for-first-time-since-2007?srnd=premium

The Fed's Rate Raising Days Are Over. Wall Street Couldn't Be Happier.

At the beginning of 2019, the Fed announced their plans to slow the economy using contractionary monetary policy. Their plan was to increase interest rates which concerned investors that the cost of borrowing might become too high, which would ultimately send the economy into another recession. In December, the odds of another interest rate increase was 30%. On Wednesday, the Fed unanimously voted to maintain its benchmark interest rate in a range of 2.25% to 2.5%. It is now more probable that we will be seeing a decrease in interest rates at some point during 2019. According to experts, there is actually a 29.3% chance that interest rates will fall. Earlier in the year, Jerome Powell announced that the Fed will be more patient in evaluating whether or not they will keep raising interest rates. It will be interesting to see the short-term effects that current interest rates will have on an economy that is expecting a slowdown.

https://www.nytimes.com/2019/03/20/business/stock-market-fed-interest-rates.html