The US Economy Is In The Cloud

The Treasury's Quarterly Refunding Statement, released this morning, was a non-event. No unexpected policy shifts or drastic changes in issuance sizes were noted, so the announcement was largely as anticipated. The FOMC's decision in the afternoon to leave the federal funds rate (FFR) unchanged was widely expected, too. So was the fact that two Fed governors dissented from that decision for the first time since 1993. Today's fireworks occurred after the stock market closed when Microsoft and Facebook beat earnings expectations. So did Qualcomm. Tomorrow, Apple and Amazon report after the close.

Tomorrow should be a good day in the stock market. That's despite President Donald Trump's latest salvos in his trade war with the world. Trump signed executive actions today imposing a 50% tariff on Brazil and a 50% tariff on certain copper products as well as suspending a duty-free perk for all countries that export goods priced under $800 into the US. The President also said that India's exports to the US will face a 25% tariff in addition to a "penalty" for what he views as unfair trade policies and for India's purchase of military equipment and energy from Russia.