Daily Commentary

MarketMinder’s View: Early days, but the eurozone may be clawing out of the pothole created by tariff frontrunning earlier this year. Its industrial production rose 0.3% m/m in July, rebounding from June’s -0.6% drop and barely missing expectations for a 0.4% rise. German production jumped 1.5% m/m, while its ZEW sentiment survey ticked up for September. “The outlook improved in particular for export-oriented sectors, which had recently suffered a strong decline, including in the automotive, chemical, pharmaceutical and metal industries, the survey said.” This coincides with the EU making significant progress on a trade deal with the US that would put tariffs at 15% (and these won’t stack on extant item-specific tariff rates) and perhaps a general realization that commerce is still humming despite tariffs taking effect in August. This is part and parcel of how markets work. Fear lowers expectations, things go moderately better than feared, and markets climb the wall of worry.

MarketMinder’s View: We are so exceedingly mixed on this article, which is often a sign something is worth a read. It discusses the intersection between the Fed and politics, so we remind you MarketMinder is nonpartisan, favoring no party nor any politician—we assess developments for their economic and market implications only. With the Fed meeting today and tomorrow, culminating in Wednesday’s interest rate announcement, this article speculates a lot about how partisan concerns may affect the debate, with President Donald Trump’s appointees facing “implicit pressure to signal that they’re at least directionally aligned with the White House,” which has called publicly for rate cuts. It surmises Trump’s three appointees may vote for larger cuts than the rest of their peers, giving the impression of a partisan split that would raise hackles. Maybe, but the important thing to remember is that the Fed has always been a political creature. Its efforts to appear politically independent are inherently political, potentially leading members to vote differently than they otherwise would have. And because they are politically appointed and reappointed, those who want to continue have incentive to push policies favorable to the White House. It is getting a lot of attention now, because of the personalities involved, but t’was ever thus. Which the article tacitly acknowledges in its second half, pointing out that the Fed has always had a lot of dissent despite its many unanimous votes. It supports this statement by noting the disparate views Fedfolk air in speeches and television interviews, but you can get much better evidence than that. The Fed releases transcripts of every meeting and conference call, letting people see all the disagreements, jokes, bad puns and debates over adverbs used in the policy statement. The problem is those come at a five-year lag, which keeps everything opaque. Those transcripts also show a long history of political decision making, including when they made the decision to force Lehman Brothers into bankruptcy instead of allowing a suitor to buy it in 2008. As MarketMinder Managing Editor Todd Bliman wrote this summer, getting Fed transcripts into public domain faster would probably solve a lot of the uncertainty folks have about opacity and politicization now.

MarketMinder’s View: If you are reading this, you are probably online a fair amount and in tune with things like electronic payments—so the news that, effective September 30, Social Security payments and IRS refunds won’t come via check anymore might be old hat for you. Yet as this article notes, over 5 million people still receive physical checks. So if you have a family member or friend who is less plugged in and potentially still receiving paper checks from Uncle Sam, they might benefit from a check-in to ensure they have everything ready to go, because we have a hunch a lot of these folks won’t be reached by mass email and social media campaigns. Beyond that, this piece notes that with digital payments comes the potential for digital scams targeting them. Be on the alert, and follow all the basic rules to limit your exposure: Don’t click on unsolicited emailed links or attachments, don’t provide your login credentials or personal information over email, and if you think there is something you need to check in your Social Security account, don’t follow an emailed link. Navigate there directly in your web browser.