Publications

According to Aaron Back of the Wall Street Journal, despite a strong economy and record-high consumer confidence, consumer spending has been slowing because banks are tightening lending standards. Back points to the Fed Senior Loan Officer Survey as evidence, which shows a net increase in banks reporting tightening lending standards in four of the past five quarters, a move that has happened as the Federal Reserve is raising interest rates and thereby increasing borrowing costs. WSJ

The Wall Street Journal reports that automakers view the Trump administration’s move to relax fuel economy standards as a boon due to high demand for larger, less efficient vehicles. Automakers have long campaigned against the industry-wide target of 50 miles per gallon by 2025, which they say will cut too far into profits because consumers increasingly want bigger cars. WSJ

The Financial Times reports that China has announced retaliatory tariffs on roughly $3 billion of U.S. goods in response to recent U.S. steel and aluminum tariffs. The tariffs target a wide range of luxury U.S. agricultural goods, along with specialized steel products and American pork. FT

According to the Wall Street Journal, vacancy rates in big U.S. malls in the first quarter of 2018 reached the highest level since 2012. Although the first quarter usually sees the weakest mall activity, experts say that this year has been especially weak despite strong overall economic activity. WSJ

The Wall Street Journal reports that American businesses are seeking an increase in the number of H2-B visas due to an acute shortage in available labor. Requests for H2-B visas are set to surpass any previous year’s total, as a multi-decade low unemployment rate and an improving economy have seen the pool of available labor shrink notably. WSJ

Sharon Nunn of the Wall Street Journal writes that lower-income Americans were responsible for the improvement in consumer sentiment this month. The University of Michigan’s Consumer Sentiment Index rose in March, driven entirely by the improving outlook of households in the bottom third of the income distribution, while households in the upper end of the income distribution expressed concerns with recent tariffs. WSJ

The Wall Street Journal reports that Philadelphia Fed President Patrick Harker believes that the Fed will have to raise interest rates three times this year, up from his earlier projection of two hikes. Harker says that the recent firming of inflation has helped raise his outlook for rate hikes and that inflation will likely rise above the Fed’s 2% target in the coming years. WSJ

The Wall Street Journal reports that Atlanta Fed President Raphael Bostic says that he supports plans to gradually raise interest rates but that fiscal policy may complicate the Fed’s actions. Bostic also said that the Fed may soon face a scenario in which the economy is growing faster than expected, which would likely cause the Fed to raise interest rates more quickly than expected. WSJ