Buckle up because is about to soar…again.
April 24 (King World News) – Peter Boockvar: According to the Chinese Ministry of Commerce spokesman speaking in Beijing today, “any reports on development in talks are groundless.” So, they are not really talking and what would any deal look like?
The Fed’s Beige Book came out with perfect timing as it captures the response of businesses and consumers to the tariff onslaught. “Economic activity was little changed since the previous report, but uncertainty around international trade policy was pervasive across reports. Just five Districts saw slight growth, three Districts noted activity was relatively unchanged, and the remaining four Districts reported slight to modest declines.” Sounds like a no growth economy.
Here is some regional commentary on the price impact. I want to make something clear here, the prices of many things are going up and the only question is who is going to eat it via the extent of which companies can pass it on. But just because it doesn’t end up in higher consumer prices for some things, doesn’t mean someone in the supply chain is not getting hurt via lost margins and profits. And whether a one-time step or not in price, we all have PTSD from the 40 yr high in inflation and it’s still going to hurt.
Coming Inflation Is Tying The Hands Of The Federal Reserve
While I know there are many legitimate economic recession worries and I have them too, reading the comments below on tariff induced inflation really tie the hands of the Federal Reserve.
Boston:
“Prices rose modestly on average, but contacts said that prices could start to rise more rapidly in the coming months.”
NY:
“Both selling price and input price increases picked up to the higher end of the moderate range. Food and insurance costs rose noticeably, and price increases for some wholesale and construction materials—such as steel, aluminum, and imported doors—accelerated. Some manufacturers and distributors have begun adding surcharges to account for tariffs on shipments already in route.”
Philly:
“Most contacts expected tariffs to increase costs and prices moving forward … The indexes for future prices paid and future prices received continued to suggest that manufacturing firms expect price increases over the next six months.”
Cleveland:
“Contacts from multiple sectors noted that some of their suppliers increased prices in anticipation of import tariffs, and many firms whose suppliers had yet to raise prices said that they expected increases in the near term. Manufacturers and construction contacts reported higher costs for steel and other materials, while multiple retailers reported higher costs to import both intermediate and finished goods. Contacts generally expected costs to grow at a strong pace in the coming months.”
Richmond:
“Many firms said that they were receiving letters from suppliers and sending letters to their customers warning that prices could increase in the near future due to tariffs. Several businesses said that until they had a better idea of how tariffs might impact them, they were minimizing new investments and planning for various cost scenarios.”
Atlanta:
“Inflationary trends prevailed across sectors, signaling that the effects of trade policy are spreading and are no longer limited to the goods space.”
Chicago:
One machinery manufacturer reported that vendors were changing prices on a daily basis.”
St. Louis:
“Large retailers announced to their suppliers they would not accept price increases due to tariffs, and an HVAC supplier reported they would now price their equipment based on shipment dates rather than contract or purchase order dates.”
Minneapolis:
“Contacts in manufacturing and construction reported that they saw raw materials prices increase in anticipation of tariffs, particularly for steel and aluminum products. “Steel prices are surging faster than they did during the 2019-2021 period when we experienced record-setting steel prices,” commented a metal fabricator. Some contacts reported placing surcharges on products using metal inputs, while a few reported increasing prices of other outputs to compensate.”
KC:
“… expectations of price growth over the next six months broadly rose at a robust rate.”
Dallas:
“The impact of tariffs on steel and machinery prices was a drag on the energy sector, particularly for firms with ongoing construction projects for whom the materials were a sizable share of costs. A few construction and real estate contacts said that tariffs had given their suppliers an excuse to raise prices, and some retailers cited being notified by their vendors of forthcoming tariff surcharges.”
SF:
“Contacts generally expected inflationary pressures to intensify over the coming months.”
Overseas…
Shifting overseas. The IFO said, “Uncertainty among the companies has increased. The German economy is preparing for turbulence.”
The April UK CBI industrial orders index rose 3 pts but still negative at -26. They said “The recent downturn in manufacturing output appears to have eased, but manufacturers still seem gloomy about their prospects amid rising costs, an unexpected decline in new orders and heightened uncertainty around global economic conditions. The combination of financial pressures, market instability and falling confidence is leading manufacturers to cut back employment and investment, with plans for spending on buildings, equipment, innovation and training all taking a hit.”
Shocking Events Unfolding In China’s Gold Market
Last week was simply a pre-Easter pause in dollar selling by foreigners after the shock of the previous week. It’s hard to think otherwise than that the slide in the dollar and the systemic squeeze on gold is set to continue and that it is just an early warning for what is yet to come…to listen to Alasdair Macleod discuss shocking events unfolding in China’s gold market CLICK HERE OR ON THE IMAGE BELOW.
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