Publications

The Wall Street Journal reports that U.S. agricultural exports to Mexico dropped precipitously in early 2017 as uncertainty regarding the renegotiation of the North American Free Trade Agreement (“NAFTA”) abounds.  Analysts say that Mexican companies are beginning to buy more agricultural and food products from other countries, as they grow increasingly concerned about the possibility of tariffs or other trade barriers with the U.S. WSJ

The Federal Reserve announced another interest rate hike yesterday, in line with expectations.  Fed officials also maintained their outlook for at least one more rate hike this year, and spelled out plans to start reducing the central bank’s massive balance sheet. WSJ

Greg Ip of the Wall Street Journal writes that in the past when unemployment was as low as it is today wage growth was much stronger. Ip argues that if a labor market this healthy is unable to produce stronger wage growth, the Federal Reserve may have an increasingly difficult time justifying rate hikes in the future.  WSJ

Treasury Secretary Mnuchin said again on Monday that the U.S. government can be funded through the beginning of September and that Congress should raise the debt ceiling before leaving for its August recess. While urging Congress to act before August, Secretary Mnuchin did not give a specific date after which the government would be forced to default. WSJ

Sarah Carney of the Wall Street Journal writes that a shortage of credit to many companies after the recent financial crisis could explain as much as one-third of the productivity slowdown in advanced economies. Firms whose balance sheets were laden with debt following the financial crisis were less able to borrow for investments in software, buildings, and research and development, thereby slowing total factor productivity growth. WSJ

The Wall Street Journal reports that U.S. lawmakers face uncertainty as to when the Treasury will run out of funds and require modifications to the debt ceiling. Congressional leaders still have yet to reach an agreement regarding the debt ceiling, although many believe that Congress should act earlier rather than later, as the Treasury’s funding may expire sooner than expected. WSJ

David Harrison of the Wall Street Journal writes that Federal Reserve rate hikes are not slowing down record gains in stock markets as officials would expect. Although market-watchers expect the Fed to raise interest rates again at its June meeting, equity markets have shown few signs of slowing down, raising concerns of overvaluation and financial bubbles. WSJ