If you hand me a stupid stuffed stoat after losing an Olympic gold medal, I will just snap.
Winter Olympic mascots Tina and Milo are stoats; a type of weasel most commonly found in Europe and the hands of disappointed Olympians. They are the latest focus of my ire. I get secondhand embarrassment watching these faux happy administrators force athletes to accept them.
Last Week This Morning
Downhill Skiing Crash - Tariffs
Lindsey Vonn deserves a ton of credit for being brave/crazy enough to give it a go. The Real Boss™ had five knee surgeries playing college volleyball, but she never tried to play the next week. Now, thanks to Lindsey, I can give her grief for not being tougher. Thanks, Lindsey!
Trump’s tariffs were struck down by a conservative Supreme Court on Friday. As usual, Trump was gracious in defeat, calling the Justices he appointed “a disgrace to our nation” and “lapdogs for the RINOs and the radical left Democrats.” He also immediately announced new tariffs that will be in place legally for 150 days.
Gold Medal: Like American skier Breezy Johnson winning the gold but being overshadowed by the Vonn story, the real winner here is the American consumer. Last week the NY Fed published research that concluded US consumers are paying for 90% of the tariffs (WSJ Tariffs). I don’t know how/if the money consumers have overpaid will end back up in their pockets, but lower prices are like a tax cut. Don’t be surprised if consumer confidence improves. Also, don’t be surprised if the WH expends considerable energy looking for ways to still get tariffs.
Silver: The T10 may experience some upward pressure as markets try to account for increased borrowing to fund the deficit instead of tariff revenue. SMBC research concludes that the T10 might experience 0.30% of upward pressure from here.
Bronze: Core PCE should benefit from price easing, perhaps eliminating chatter about hikes. This should help ease market concerns from Friday’s above consensus number.
Stupid Stuffed Stoat: Marco Rubio’s going to be put in charge of figuring out the logistics of the $150B+ in refunds, right?
Bobsledding et al and the Jobless Boom
Is there anything more confusing in the Winter Olympics than the different flavors of bobsledding? Oh, it’s not enough to go shooting down an ice tunnel at 90 mph, why don’t you turn around and do it face first. Then for fun let’s rename it Skeleton. Oh, one person isn’t enough, let’s add 3 others. Wait, what if instead we just stack people on top of each other? “That ride was awesome! But you know what it was missing? Someone laying on top of me.”
The job market is just as confusing. Hiring last year was revised down to just 15k per month, which feels like it’s contractionary even after accounting for immigration policies. The Unemployment Rate fell last month. These are all good signs, but it’s just very confusing.
Gold Medal: Payden & Rygel Chief Economist Jeffrey Cleveland put together this interesting graph that tracks the delta between GDP and NFP. Usually, we see this gap surge during a recovery from a nasty recession. But we are in a unique time where GDP has been doing well despite almost no hiring. He refers to it as a “jobless boom.” His thesis is basically, “something has to give. Either GDP cools off or hiring picks up.”
Silver: Unfortunately for Jeff, he published that graph right before Friday’s disappointing GDP data. If something has to give, maybe GDP just gave? Someone hand him a stupid stuffed stoat and shove a camera in his face.
Bronze: Snoop stole our hearts again. Maybe his next single is “Nuthin’ but a Stoat Thang”. That’s the only way these disease-ridden rodents could be endearing.
Hockey and US Exceptionalism
Do you believe in miracles?! For the first time in 46 years, the USA Men’s Olympic Hockey Team won gold. That’s right – our last gold was at Lake Placid! What an incredible game topped only by the toothless interview with winning-goal scorer Jack Hughes. It was fun listening to someone so unabashedly proud to be American instead of apologizing for it.
Gold – USA! USA! USA! We are still the world’s mattress.
Even China remains a big buyer, particularly of Treasurys. I’ve highlighted the excellent work of Brad Setser before, but it bears repeating. China isn’t dumping Treasurys, they’ve just gotten better at disguising purchases through custodial accounts in Europe. Look at Belgium’s holdings of US Treasurys over the last 10+ years…they now hold $400B in Treasurys. That makes them the 4th largest holder of Treasurys in the world. Luxembourg is 6th. Guess who’s 7th? The Cayman Islands. Do those countries sound like legit buyers of Treasurys? If so, I have a diamond encrusted stuffed stoat to sell you.
Silver: Canada. In both the men’s and women’s finals, Canada lost to the US because ‘Merica.
Bronze: Jack Hughes dentist. Or Jack Hughes’ PR team getting a dental sponsor. Or mouthguard manufacturers. Or dentures.
Stupid Stuffed Stoat: Did you know the hockey coaches don’t get team medals? Guess what they do get…yep, those stupid stuffed stoats. Feed ‘em to the Bald Eagles, ‘Merica!
The Week Ahead
Much quieter week ahead, with about 8 million Fed speeches scheduled. I wonder how that might change under a Warsh Fed?
Keep an eye on tariff news. I suspect there will be a lot of back and forth in the weeks ahead.