Publications

According to the Wall Street Journal, U.S. retailers are cutting orders, negotiating down prices, and demanding faster turnarounds from Chinese suppliers as the effects of tariffs spread. Chinese manufacturers, also strained by tariffs, are attempting to find new customers outside the U.S. and are offering discounts to ease the drop in orders. WSJ

Sam Fleming of the Financial Times reports that the Federal Reserve has identified a hard Brexit deal and Italian sovereign debt sell-off as risks to the U.S. financial system in its Financial Stability Report. The Fed’s assessment also flagged corporate debt and geopolitical uncertainty as potential triggers of volatility. FT

The Wall Street Journal reports that Fed vice chairman Richard Clarida says that a recent spurt of productivity growth could explain why inflation remains relatively contained despite the hot economy. Clarida also noted that the sharp deceleration in business fixed investment in the third quarter will need to be reversed if the recent pickup in labor productivity growth is to be sustained. WSJ

According to the Wall Street Journal President Trump expects to move ahead with boosting the current tariffs on $200 billion of Chinese imports from 10% to 25%. The President said that it is highly unlikely that he would accept Beijing’s request to refrain from raising tariff rates and that he also planned to impose tariffs on the remaining goods imports from China. WSJ

The Wall Street Journal writes that Chinese ambassador to the U.S. Cui Tiankai hopes the President Trump and Chinese President Xi Jinping will make progress on economic and trade issues when they meet at the Group of 20 meetings in Buenos Aires. The Chinese ambassador stated that if current tensions between the U.S. and China continue, global markets may become fragmented. WSJ

Kris Maher of the Wall Street Journal reports that the cost of major infrastructure projects will rise due to tariffs, a strong economy and tight labor market. Through October, the prices of diesel fuel, asphalt, and steel mill products had increased significantly year-on-year, contributing to the rising costs of infrastructure investment. WSJ

The Financial Times reports that a trade war between the U.S. and China could put significant downward pressure on global growth by by 2021. According to the authors, the worst case scenario would cause global growth to be 0.8% below baseline projections by 2021, with United States output more than 1.0% below its baseline.  FT