The Futures are up, of course.
The Futures are always up on Monday morning as it’s a low-volume event and “THEY” can start the week off on a good note. Since lat night, at 6pm, the Dow was up at 24,550, down to 24,350 and now back to 24,450, which is 50-points better than Friday’s crappy close so YAY!, I guess. It’s all total BS, of course and I don’t even work Mondays anymore (this isn’t me, this is PhilBot 3000, my AI work in progress that will take all of your jobs, starting with mine) so it just doesn’t matter but, for the sake of having a post – we’ll pretend that it does…
Both the IMF and the World Bank had meetings this weekend in Washington, DC and the general consensus there was that the Global Economy is good but Debt and Trade Wars risk making it bad again. Since Debt and Trade Wars are Donald Trump’s go-to policy moves – we’re probably screwed. A communique by the IMF’s main advisory committee, released Saturday, represented a ratcheting-up of pessimism since the group’s last semiannual meeting in October. “I don’t know where the trade dispute is going quite frankly,” Budget Secretary Diokno said in an interview. “President Trump keeps changing his mind.”
Central bankers sounded the alert that a trade war would leave them worrying more about the economic fallout than any boost tariffs would give to inflation. Colombia’s central bank president said a trade war would be “catastrophic,” his Paraguayan peer said it would be “bad for everyone,” while Japan’s chief described protectionism as “very undesirable.” Across the board, 2019 growth forecasts are moving lower while debt is getting quickly out of control.
In particular, according to Bloomberg, the IMF is worried that markets might be underestimating the threat of an inflation shock in the U.S., where the Trump administration is increasing fiscal stimulus with the economy at or near full employment. A surge in inflation might force the Federal Reserve to raise interest rates faster than expected, a move that might cause turbulence in emerging market. The fund warned that global public and private debt has reached a record $164 trillion. A spike in interest rates would test the ability of borrowers to refinance all that debt.