Warning signs abound in commercial data as Fed hints at interest rates reduction

Federal Reserve President Jerome Powell marked Friday that the first decrease in price of 2025 could come next month, compressed as Fed is from a weakening of the labor market and rising inflation It was associated with President Trump’s trade war with the world.

I will leave the job market to others. In the commercial data of the goods, I see warning signs that could give a generally careful Fed president and other members of the Federal Reserve’s cessation vote.

1. In just three months, invoices, as a percentage of total imports, were quadrupled, covering 10% for the first time in two decades, according to available government data that it analyzed and certainly decades more. Since invoices have been largely steady for decades, after decades of gradual decline, the rate of growth-the quadruple-is almost certainly unprecedented by the 1930 Smoot-Hawley act that often referred to as a factor that contributes to the great downturn.
2. The same three months – April, May and June – the percentage of total imports that entered the United States invoice decreased below 65% for the first and second hour in less than 20 years, 234 months.
3. The US trade with the world fell for a third consecutive month in June, which is the latest data of the inventory office.
4. The Fed will make the September decision without data reflecting the impact of invoices on most of the world’s top trading partners. The invoice to the three largest US, Mexico, Canada and China importers, respectively, are not still resolved. The wide outline of a The agreement announced with the European Union happened at the end of July. Trump has announced invoices in a wide range of imports categories that will not be reflected in the data, including semiconductors and medicinal products.
5. The US trade deficit was a record of $ 692.15 billion by June, a 27.88% jump compared to the first six months of last year. While this cannot be concerned with Paramount concerns about the Federal Reserve and certainly not most economists, Trump could react aggressively in the coming weeks, as his attempt to significantly reduce the commercial deficit has really been suspended.
6. Another worrying number is that the value of US exports earlier this year declined below 37% of total trade. While this percentage is now slightly over 37%, they were and still are particularly bad news for US exports and producers and manufacturers. The last time ended 37% was in 2006. While a statistical cousin in the commercial deficit is really clearer.

There are also some wild cards in the game, the first of which will almost certainly play in the Fed calculations and the second one could not.

First, Trump was based on the law on international financial powers for much of his trade war, declaring the US trade deficit for a national emergency. In May, the US International Trade decided that the invoices were illegal. While this case is in appeal, these invoices remain in force. The case will almost certainly reach the Supreme Court. How long can the issue remain unresolved?

Leading to the second wild card. Congress interim elections will determine whether Trump continues with a majority in the House of Representatives. The alarming inflation associated with the invoices that were the Republican president, if implemented, would certainly make it more difficult to maintain the subtle majority.

Come in September, the Federal Reserve will once again decide whether to reduce interest rates. It is safe to assume that the Fed will have much more data on the labor market and inflation, especially in terms of the impact of invoices, as incomplete.