Navarro on Trade

Navarro looking pretty strong here (takes a hack at Powell Fed too...):







China entities obviously realizing lower prices of their goods in USD terms in response to US tariffs and this is then reflected in the weaker exchange rate...  "pumping!" non-risk reserves into the China banking system to "lend out!" not helping either...

Fed last year increasing rates now in the post GFC regulatory environment, where the CCAR compliance requires more Tier1 quality assets at the banks, has an increased negative effect on bank residual and thus a more pronounced negative effect on credit creation.

Fed's rate increases of 100bps last year created over $50b of unrealized losses on these Tier1 quality bank available for sale securities at its nadir.  Shitty 4Q growth dipped back below 3 to 2.6%, equity index prices reduced 20%... probably fair to posit the Fed's rate increases last year took a full point off GDP growth...