UPDATE: Looks like Trump's threat may have worked...stocks bid up 1% as Trump tweets progress on trade deal...
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Both the Consumer Price Index and the Producer Price Index in the U.S. came in very tame, giving credence to President Trump's assertion that there is little inflation in the U.S. economy and short term interest rates should be lowered as the world reacts to the trade war between China and Washington.
CPI (MoM) (Nov) was reported yesterday at 0.3% vs 0.2% consensus estimate.
CPI ex Food and Energy (MoM) (Nov) was 0.2% hitting estimates.
CPI (YoY) (Nov) was 2.1% vs 2.0% estimate.
Yesterday the Federal Open Market Committee agreed to hold shorter term rates steady at 1.75%.
PPI was reported today (YoY) (Nov) at 1.1% vs 1.2% estimate. MoM (Nov) printed at 0.0% vs 0.2% estimate.
PPI ex Food and Energy (MoM) (Nov) printed at -0.2% vs 0.2% estimate. YoY in Nov the number was 1.3% vs 1.6% estimate.
Continuing Jobless Claims (Nov 29) were 1.667M vs 1.668M estimate. Initial Jobless Claims (Dec 6) was 256k vs 213k estimate. The four week average printed at 224k.
China reacted angrily to reports from Reuters via White House sources that tariffs on China will be raised on Dec 15 after being delayed by POTUS to try and get a 'phase one' deal. Now it looks as though Trump's advisors have given up on getting a trade deal before the election, completely freaking out Beijing.
"I’m expecting them to raise the tariffs on Sunday," one "source" told Reuters, who is very likely Peter Navarro who is using Reuters as a trial balloon conduit, while Larry Kudlow uses Bloomberg and the WSJ. “The administration is preparing its talking points about how that’s the right thing to do. The message is that it will not be painful," reported Zero Hedge.
“The message is that it will not be painful,” said the one source familiar with the administration’s thinking. “People have been proclaiming for a year and half that the sky is falling, and the sky isn’t falling yet."
It looks like China thought all along they could stall and delay and eventually get all tariffs removed for a few billion in agricultural purchases, and then could continue to rip off American companies with impunity.
As many before them, they completely underestimated The Donald.
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