Inside the Economy: Tariffs, European Union, Interest Rates, and Markets

This week on Inside the Economy, we discuss tariffs, trade relations with the European Union, interest rates in the U.S. and abroad, and global stock market performance. U.S. Customs duties reached an all-time high, generating $25.5 billion in revenue in May. What sectors are the primary contributors to this surge? In recent developments, the U.S. and the E.U. have begun discussions on future trade agreements. As our largest trading partner—accounting for roughly 5% of U.S. GDP—what is currently the largest import from the E.U.? Turning to the bond market, the 30-year Treasury yield has hit both a yearly and decade high. While Moody’s recent downgrade played a role, what other factors might have contributed to the spike in yields? Finally, we explore market expectations for interest rate changes. How much easing is currently priced in based on 12-month federal funds rate futures? Tune in to learn more!

 

Key Takeaways:

• 30-year bond yield at 5.03%
• Head CPI Inflation at 2.3% (YOY)
• Bank of Japan Policy Rate at .50% in May