US: Low Corporate Sector Inflation open.substack.com/pub/mortimer...

Amid talk of an IMF program for the UK, what advice would Chancellor Denis Healey give? He was at HMT for the 1976 IMF program and raised the top marginal rate to 83% in 1974 and added a 15% surcharge on unearned investment income, ie a 98% top rate, in 1975. In the style of James Gilray

Tariffs Take a Tumble The ruling has BIG economic and constitutional implications open.substack.com/pub/mortimer...

Jackson Hole: Inflation First Among Equals Powell will greatly annoy Trump today. open.substack.com/pub/mortimer...

Las Vegas: Canary in the Coal Mine open.substack.com/pub/mortimer...

Look who dropped in for dinner. Made a meal of my peaches in the yard. Fortunately the dogs were in...

US: July CPI Preview open.substack.com/pub/mortimer...

Inflation makes itself at home in the UK substack.com/@mortimerlee...

US Payrolls: That Wile E. Coyote Feeling bit.ly/452TmB0

The absolute best! I was lucky enough to be the IMF desk officer for Mauritius. Lovely place, but the people are even better - warm and friendly. Just wonderful.

US Payrolls: That Wile E. Coyote Feeling bit.ly/452TmB0

In was happy that my GDP model did well at predicting today’s GDP release. The Q2 print was 3.0%, my estimate was 2.9% and the Atlanta Fed’s GDPNOW was 2.4%. The Blue Chip consensus was around 2%. My model did better because of its dynamic elements.

The BLS says it's due to resource constraints (ie, cuts). A good deal of the price data comes from visits to establishments. Presumably that has been cut, with more reliance on internet downloads from big stores. Big stores tend to have lower prices than independents, so this will bias the cpi down

The BLS says it's due to resource constraints (ie, cuts). A good deal of the price data comes from visits to establishments. Presumably that has been cut, with more reliance on internet downloads from big stores. Big stores tend to have lower prices than independents, so this will bias the cpi down

FedWatch: July Preview open.substack.com/pub/mortimer...

Jerome Powell: Fed Chair Report Card open.substack.com/pub/mortimer...

French Budget Blues open.substack.com/pub/mortimer...

The Fed Stakes: Runners and Riders open.substack.com/pub/mortimer...

Letter: The problem is too much spending, not too little tax

ECB: Strategy and Regime Change Inflation's not in Kansas Anymore open.substack.com/pub/mortimer...

Who Created the UK's Fiscal Disaster? open.substack.com/pub/mortimer...

France: Fiscal Challenges open.substack.com/pub/mortimer...

Today's UK GDP numbers, another m/m fall, show that the double act of Reeves and Starmer not only don't understand economics, but also fail to grasp basic English. They aim to "kick-start" the economy, whereas their policies are giving it a good kicking. Here's a graphic to help them understand.

Will UK Quantitative Tightening End? open.substack.com/pub/mortimer...

Foreign Exporters are Paying the Tariffs But Not Much, and Not for Long open.substack.com/pub/mortimer...

The global economic effects of the US bombing Iran. Beyond the Tipping Point for Global Growth: Recession Looms substack.com/@mortimerlee...

When the UK Chancellor says he economy is turning a corner, this is what comes to mind. (NB all 571 passengers on the Oceanos were rescued)

It’s a bit disturbing when the pensions minister has little idea how much pensions costs are rising each year…. ..but totally consistent with the maths-challenged Chancellor @torstenbell.bsky.social

Ahead of Wednesday’s spending review, Rachel Reeves should offer a prayer to Saint Jude Thaddeus, patron saint of lost causes. There should be a special mention of her fiscal rules, because it will take a miracle to stick to them.

Given his views on the sustainability of US deficits and debt, the administration must rejoice that Musk doesn’t own a rating agency.,.

What’s bad news for the economy is great news for the banks. They must be thinking about supporting Trump 2028 to keep the volatility high

The markets, in effect, issued a temporary restraining order on Powell's dismissal, but fireworks will resume when activity data soften. Meanwhile, SOCUS will move in President Trump's direction, but how far is unclear. White House versus Fed open.substack.com/pub/mortimer...

A collision is inevitable @federalreserve.bsky.social bit.ly/4cySwxO

Revealed! President’s top tariff advisor

Exempting smartphones and computers from tariffs makes sense because the US price elasticity of demand is much lower than the elasticity of supply. How those elasticities rank against each other determines who bears the burden of tariffs - in this case the consumer. But that was always the case

Now, what tariffs shall we apply this time next week?

A good team player works hard to stop his team fumbling the ball or scoring an own goal. Bessent has failed miserably. via @NYTimes www.nytimes.com/2025/04/12/u...

The partial retracement of says stocks today after yesterday’s surge reflects 4 things 1) the jump yesterday owed a lot to short covering 2) there are still huge tariffs on China 3) there’s still financial stress in the system 4) further capricious and “instinctive” policy shifts are very likely

125% China tariffs could look like an attempt to wreck China’s economy Beijing could view this as going beyond mere bullying to something much more hostile After it’s “century of humiliation” China will not yield Delinking the US and Chinese economies reduces the costs of war for each Dangerous

The partial retracement of US stocks today after yesterday’s surge reflects 4 things 1) the jump yesterday owed a lot to short covering 2) there are still huge tariffs on China 3) there’s still financial stress in the system 4) further capricious and “instinctive” policy shifts are very likely

Anxious about the economy? Depressed by stock losses? Need cheering up? Then don't, whatever you do, read the attached on the mushrooming financial crisis. Financial Crisis: Central Banks Must Act open.substack.com/pub/mortimer...

Return of QE When there’s a crisis of dollar liquidity, there’s only one institution that can’t run out of greenbacks. The @federalreserve.bsky.social. Losses in financial markets means there’s a dash for cash, as basis trade turmoil shows. The Fed must step in. Call it what you will, it’s QE.

Keir Starmer reveals cunning plan to run with the fox and hunt with the hounds www.thetimes.com/article/4e54...

Man who has seen his share price drop by almost $50 since Feb says, nothing to see here” www.telegraph.co.uk/business/202...

Not just imported goods prices will rise Eg cars Imported car prices up sharply will raise used foreign car prices Many US cars contain foreign parts US suppliers will raise margins Used US car prices will rise Car parts and repair costs will rise Car insurance costs will rise

The tariffs are disastrous. Even more worrying is the potential financial fall out. The plunge in stocks = big losses to leveraged accounts. The cash flows of numerous firms are trashed. And we have an increased role for nonbank financial intermediaries. Avoiding trauma will be tough

The tariff increases are about double of those in my paper last December. Doubling my calculated effects, I’m looking for 2.5% added to prices and a 2% hit to US growth. With retaliation inevitable, recession is now the main case. That’s before the real risk of a financial crisis bit.ly/4j8epXK

Lower growth and higher inflation was the conclusion and, while you can argue with the numbers, the direction is correct. The shoe that is yet to drop is bringing the Fed inside the tent. Sooner or later, there will be serious work done there.