Trump Dealing ... Consumers Consuming ... Employers Employing

Liberation Day II is coming on August 1. President Donald Trump has stated that it won't be postponed, unlike Liberation Day I, which was initially scheduled for April 2 but was postponed to July 9 and then to August 1. According to a July 10 Reuters report, Trump is considering raising his 10% base tariff to 15% or 20% on most trading partners by that deadline. That would be consistent with our view that he would like to get this issue behind him so that he can focus on campaigning for Republicans running in next year's congressional elections.

Meanwhile, Trump may be dialing down his almost daily rants about Fed Chair Jerome Powell, calling on him to either lower interest rates or resign. He has threatened to fire Powell. Yesterday, he moderated his stance, saying, "I don't rule out anything, but I think it's highly unlikely unless he has to leave for fraud." There has been no evidence of fraud, and the Fed has pushed back on criticism of its handling of the renovation of its headquarters building.