April 24th Financial News
FastBull FeaturedSummary:
Knot: A neutral policy stance is appropriate as shocks continue to unfold; U.S. tariff revenue surges over 60% in April, reaching at least US$15 billion…
[Quick Facts]
1. Trump considers partial tariff exemptions for automakers
2. Beige Book: “Tariffs” were mentioned 107 times! The economic outlook has deteriorated significantly in many regions
3. Knot: A neutral policy stance is appropriate as shocks continue to unfold
4. March U.S. new home sales surge, surpassing forecasts, led by gains in the South
5. U.S. tariff revenue surges over 60% in April, reaching at least US$15 billion
[News Details]
Trump considers partial tariff exemptions for automakers
According to the Financial Times, President Trump is contemplating exemptions from certain stringent tariffs for automotive manufacturers, representing a concession following recent lobbying efforts by industry executives amidst the ongoing trade war. However, the 25% tariff on all imported finished vehicles will remain in effect. Another 25% tariff on automotive components will also be retained, with an effective date of May 3. Despite the prior exclusion of automotive products from "reciprocal" tariffs with major trading partners, U.S. automakers are currently seeking further exemptions.
These concessions signify an initial victory for the automotive sector and another retreat by Trump from his most aggressive tariff positions. Sources indicate that current negotiations primarily focus on streamlining the taxation process, such as relaxing the rules of origin requirements for automotive components. This policy adjustment reflects the Trump administration's pragmatic response to specific industry pressures while upholding the core tenets of its "America First" trade policy.
Beige Book: “Tariffs” were mentioned 107 times! The economic outlook has deteriorated significantly in many regions
In the Federal Reserve's Beige Book released on Wednesday, the term "tariffs" was cited 107 times, more than double the frequency in the previous report. "Uncertainty," in various forms, appeared 89 times. Economic activity showed minimal change since the last report, yet uncertainty surrounding international trade policies was a recurring theme across reports. Only five regions reported modest economic expansion, three indicated stable activity, and the remaining four noted a slight contraction.
Overall, both leisure and business travel have declined, with a decrease in international tourism in certain regions. Housing sales have increased, and many regions continue to experience low inventory levels. Net loan demand has remained flat or slightly increased, while non-financial services demand has decreased in some regions. Transportation activity has seen a modest uptick. Manufacturing performance is mixed, with two-thirds of the regions reporting little to no change or a decline in manufacturing activity. The energy sector has experienced a slight expansion. Agricultural conditions are relatively stable across multiple regions. The outlook has significantly deteriorated in several regions, driven by increased economic uncertainty, particularly concerning tariffs.
Prices have risen across all regions, with most indicating that businesses anticipate accelerated input cost growth due to tariffs. Many businesses have received notifications from suppliers regarding cost increases. Businesses report they have added tariff surcharges or shortened pricing terms due to trade policy uncertainty. Most businesses expect to pass additional costs to customers. Profit margins are reportedly being squeezed due to rising costs.
Knot: A neutral policy stance is appropriate as shocks continue to unfold
During his Wednesday speech, ECB Governing Council member Knot stated that a rate cut to stimulate the economy is unwarranted, given the uncertain medium-term effects of recent economic shocks. While the pace of disinflation may exceed prior forecasts, he noted that the implications of trade friction and increased European defense and infrastructure spending remain "far from clear." He stated, "This suggests that, overall, a policy rate that is neither accommodative nor restrictive remains viable. In any case, we will maintain a medium-term focus and strive to formulate a policy that sustainably keeps inflation near the 2% target level, with confidence not only at the baseline but also across a range of scenarios."
March U.S. new home sales surge, surpassing forecasts, led by gains in the South
U.S. new home sales experienced a significant increase last month, driven by a slight decrease in mortgage rates and ongoing sales incentives designed to stimulate the spring selling season. Data released Wednesday revealed that new single-family home sales rose by 7.4% to a seasonally adjusted annual rate of 724,000 units in March, primarily fueled by a surge in sales within the South. This performance exceeded the expectations of all economists surveyed. Sales in the South reached their highest pace in nearly four years, building on the modest growth observed in February following adverse weather conditions earlier in the year. Sales also increased in the Midwest, while the West and Northeast regions saw declines.
U.S. tariff revenue surges over 60% in April, reaching at least US$15 billion
According to data released Wednesday by the U.S. Department of the Treasury, U.S. tariff revenue surged over 60% in April, reaching at least US$15 billion, as President Trump's tariff measures took effect. This would establish a new monthly record in dollar terms, based on the aggregated data. The latest figures primarily reflect the tariffs paid by major importers and brokerage firms in April for imported goods that arrived at U.S. ports in March. Approximately two-thirds of importers pay tariffs monthly on the 15th business day of the following month. Treasury data indicates that tariff and other excise tax revenues on specific goods will total at least US$15.4 billion in April.
During his Wednesday speech, European Central Bank Governing Council member Villeroy stated that the impact of U.S. President Trump's tariff actions on Eurozone prices remains uncertain, potentially exerting downward pressure overall.
He further indicated that there are currently no inflationary risks in Europe, and in terms of bringing inflation back to the 2% target, "mission accomplished" is nearly the case, as he mentioned in his speech at the Atlantic Council on Wednesday. "The significant slowdown in wage growth is another piece of evidence," he added.
[Today's Focus]
UTC+8 20:30 U.S. March Durable Goods Orders MoM
UTC+8 21:00 ECB Chief Economist Lane Speaks
UTC+8 22:00 U.S. March Existing Home Sales
UTC+8 23:35 ECB Governing Council Member Rehn Speaks
UTC+8 05:00 Minneapolis Fed President Kashkari Speaks
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