Discussing peace is a more constructive approach than issuing threats of war. In this light, President Trump’s historic summit with Kim Jong-Un of North Korea—a first for a sitting US president—can be viewed as a positive step. However, the lack of substantive agreements, apart from a joint statement committing to the goal of denuclearizing the Korean peninsula at some unspecified time in the future, casts doubt on the actual progress being made. The favorable imagery is easy to obtain, but making verifiable advancements presents a significant challenge, and currently, it remains unclear if there have been any meaningful changes regarding North Korea.
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Trump and N. Korea’s Kim strike a deal to denuclearize the Korean peninsula: Reuters
US establishes a new informal embassy in Taiwan, provoking China: Reuters
Could another Fed rate hike trigger a recession alert? WSJ
US Treasury imposes sanctions on Russian entities: Reuters
The end of internet neutrality brings new uncertainties: The Verge
Price war among ETFs extends to fixed income and gold markets: FT
Demographics examined as a factor in subdued growth: VoxEU
US consumer inflation expectations remain stable at 3.0% in May: NY Fed
Fed funds futures indicate a 96% chance for a rate hike on June 13: CME
Recent data show that US equities achieved the highest gains among the major asset classes last week, as indicated by a collection of exchange-traded products. Foreign real estate stocks and US real estate shares followed closely, securing second and third places, respectively, for the trading week that concluded on Friday, June 8.
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Trump publicly criticizes key US allies on trade: BBC
Trump expresses optimism about the upcoming US-North Korea summit: Reuters
Chancellor Merkel states that the EU will retaliate against US tariffs: Reuters
Economists anticipate the Fed to maintain gradual rate increases: Bloomberg
The forthcoming OPEC meeting may spark significant debate regarding higher output: OilPrice
US wholesale inventories rise slightly in April: Reuters
Small-cap stocks (Russell 2000) continue to outperform large-cap stocks (S&P 500) in 2018:
By Barry Eichengreen
Review via Foreign Affairs
In this exploration of two centuries of populist movements and political upheavals in Western democracies, Eichengreen posits that economic insecurity, labor disruptions, and widening inequality have historically spurred backlash against the establishment, from the Luddites of the early 19th century to the tumultuous events of the interwar period. However, not every era of economic hardship incites populist uprisings, nor do all such movements achieve success. Eichengreen argues that populism flourishes particularly when economic insecurities reveal the conflicting interests between the general populace and elites, often catalyzed by financial crises that lead to bailouts favoring wealthy individuals.
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Recently, two analysts raised concerns that “soft” economic indicators may no longer be reliable for assessing macro trends. According to Jim Bianco from Bianco Research and Ben Breitholtz from Arbor Research & Trading, the soft data and the forecasts derived from it are influenced by a cycle of groupthink, herd mentality, and political biases, rendering them less useful. If their analysis holds true, traditional indicators such as the ISM Manufacturing Index and the University of Michigan Consumer Confidence Survey may offer diminished insights into business cycle trends.
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Trump critiques Canada and France on trade policies ahead of the G7 summit: MarketWatch
Trump emphasizes “attitude” over thorough preparations for the North Korea summit: Politico
US jobless claims decrease last week, indicating a tightening labor market: Reuters
Consumer credit growth in the US hits a seven-month low in April: MarketWatch
Survey data points to another downward revision for Q1 GDP growth: Reuters
Former Fed Chairman Bernanke warns of potential challenges for the US economy in 2020: Bloomberg
Despite rising economic optimism, support for GOP candidates remains stagnant: NBC
The anticipated risk premium for the Global Market Index (GMI) stood at 4.9% for May, maintaining the same level as the previous month. This projected return above the “risk-free” rate serves as an estimation for the long term concerning the index—an unmanaged, market-value-weighted portfolio that incorporates all the major asset classes.
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The Fed appears poised to raise rates above inflation for the first time in a decade: Reuters
German factory orders decline for the fourth consecutive month in April: Bloomberg
Unionized UPS workers are edging closer to a potential strike: USA Today
India’s central bank increases rates for the first time in four years: CNNMoney
The perceived strength of the US labor market may not be as robust as it seems: MNI
US trade deficit narrows for the second consecutive month: AP
US productivity plummets to nearly half of the first-quarter growth forecast: MarketWatch
Technology stocks fuel the rally in US equities: Bloomberg
The US stock market (S&P 500) achieves its highest close since mid-March:
Toward the end of 2017, several analysts cautioned that the declining annual growth rate of commercial and industrial lending in the US could soon turn negative, signaling a potential warning for the economy. However, that alarming prediction did not materialize. Current assessments indicate that the risk of a US recession is virtually nonexistent, and early forecasts for second-quarter GDP growth suggest a stronger trajectory as year-over-year loan growth has continued to stabilize through April.
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This reflection encapsulates various recent political and economic developments, focusing particularly on the interactions involving North Korea and US economic trends, while enhancing clarity and flow. The article structure has been preserved, ensuring all elements remain in their original positions.
