Somehow, it staged a remarkable comeback. “Transitory” was spoken five times during the post-meeting press conference, twice by Chair Powell: “As I’ve mentioned, it can be the case that it’s appropriate sometimes to look through inflation if it’s going to go away quickly without action by us, if it’s transitory. And that can be the case in the case of tariff inflation. I think that would depend on the tariff inflation moving through fairly quickly and critically, as well on inflation expectations being well-anchored, longer-term inflation expectations being well-anchored.”
We’ll have more information to decipher on April 2nd, though it may take a few months to have a clear grasp of President Trump’s intentions. Markets, the business community and American households still hold out hope that instability and economic weakening would force the administration to retreat from its aggressive tariff regime. But we’ve seen enough to make some baseline assumptions.
Tariffs are the centerpiece of a radical plan of U.S. reindustrialization and self-sufficiency – fundamental to MAGA. Such a strategy of transformative structural change would unfold over years, marking a momentous reversal of the forces of globalization that have been instrumental in containing consumer and producer prices in the face of historic monetary inflation. From this analytical perspective, the resurrection of “transitory” would seem optimistic, if not imprudent.
“Transitory,” though, retains an outside shot at redemption. Evidence builds by the week that the world is transitioning between cycles. The multi-decade global super boom cycle is faltering, with historic Credit and speculative Bubbles hanging in the balance. Uncertainty is at its most extreme.
The current environment is characterized by an extraordinary interplay of highly complex systems. Acutely fragile global market Bubbles have turned highly unstable. The odds of panics, financial crashes, and crises are uncomfortably high. Bubble economies are increasingly vulnerable to shocks in confidence and disruptions in market-based finance. Wild unpredictability has engulfed politics and geopolitics. The nature of policy responses to market dislocations is highly uncertain.
With already elevated inflation at risk of a tariff and trade-war acceleration, central bankers and their QE cure-all will confront much greater challenges than those previously faced. Will central bankers be slower to respond, providing crisis dynamics a favorable window for strengthening? And are they prepared for the massive QE that would be necessary in the event of a major speculative deleveraging episode? Adding another important layer of complexity, how might today’s weakened global bond markets respond to powerful reflationary QE in an environment prone to upside inflation surprises?
On the subject of unstable markets, it was another interesting week. While the S&P500 rallied 2% from Tuesday’s lows to Wednesday’s intraday highs, equities missed an opportunity for an expiration-assisted rally. Global bond yields dropped. Treasuries again appeared on the receiving end of safe haven flows. And while nothing to write home about, the weakened dollar mustered a gain for the week.
The “periphery” – at home and abroad – is the realm of important developments. The emerging markets (EM) have been bolstered over recent weeks by drops in Treasury yields and the dollar. This respite might have largely run its course. As always, the “periphery” is vulnerable to shifts in market sentiment (risk aversion), waning liquidity, contagion, and crisis dynamics. Moreover, many EM countries suffer festering social and political instability at this perilous super cycle juncture.
March 19 – Financial Times (Ayla Jean Yackley and Andrew England): “For months, events at home and abroad appeared to be moving in Turkish President Recep Tayyip Erdoğan’s favour. Years of fraught relations with Europe were warming as Ankara’s importance as a Nato ally was reinforced by US President Donald Trump’s pivot to Moscow; Turkey’s runaway inflation was cooling; and interest rates, long the bane of Erdoğan, were finally falling… But the darker side of Erdoğan’s rule was simmering in the background as the authorities launched a months-long crackdown against his political opponents, while the veteran leader raged against an ‘opposition problem that poisons democracy’. That reached an extraordinary climax on Wednesday with the arrest of Ekrem İmamoğlu, the popular mayor of Istanbul who is widely considered the most potent politician to challenge Erdoğan since the president came to power in 2002… ‘He has crossed the Rubicon,’ said Suat Kınıklıoğlu, a former MP. ‘There is no going back from here for him.’”
March 20 – Bloomberg (Beril Akman): “President Recep Tayyip Erdogan’s escalation of the campaign against his most prominent political rival came at the expense of Turkey’s market stability. It may be a price he’s willing to pay to clear the path to a third term. Investors took fright at the development… Authorities said banks sold as much as $9 billion to support the lira… ‘What happened is a coup attempt,’ Ozgur Ozel, chairman of the main opposition Republican People’s Party, the CHP, to which Imamoglu belongs, told a rally… ‘This is no longer a case of Ekrem Imamoglu, it is a case of all our people.’”
Political instability erupted in Turkey at the hand of its autocratic and antidemocratic president. The Turkish lira immediately collapsed 12%, though record ($9bn) intervention reduced the day’s loss to 3.2%. Turkey’s central bank boosted short-term rates two percentage points to 46%. Yet the lira’s 3.1% loss was the largest weekly decline in almost two years. Turkish stocks were slammed 16.6%, with “banking stocks experiencing their worst weekly drop since at least 2001” (Bloomberg). Turkey’s local currency bond yield spiked 293 bps to 29.16%. “Turkish Lira Rout Sours Lucrative Carry Trade.” “Turkey’s Erdogan Warns Opposition Over Calls for Mass Protests.”
While contagion impacts were generally subtle, some key EM currencies reversed lower. For the week, the Mexican peso declined 1.5%, the Colombian peso 1.1%, the Polish zloty 0.9%, and the Indonesian rupiah 0.9%. Brazil’s real (up 0.2%) was supported by a 100 bps increase in the main policy rate to 14.25% – the high back to October 2016. EM CDS spiked to the high since August 6th. “Chinese Stocks in Hong Kong Cap Worst Two-Day Drop Since October.” “Trump’s ‘Big One’ on Tariffs Has Emerging Market on Edge.”
Important developments continue to unfold at the U.S. “periphery.” Leverage loans remained under pressure, with prices Thursday trading at lows since last August. After recent significant widening, junk bond spreads this week narrowed only marginally. High yield CDS prices traded again this week to highs since August.
The clouds enveloping our nation darkened this week. Whether you support it or detest it, a troubling reality has begun to sink in: This President and his administration are radical and willing to risk social, financial and economic meltdown as they doggedly pursue their far right agenda.
My thoughts this week returned to waterboarding. In the post-9/11 environment, our nation was understandably possessed by the war on terror. Most believed that tormenting terrorists holed up in Guantanamo into providing intelligence was in the best interest of United States security. We were willing to tolerate a bending of the rules – and a compromise of our values. Our government used “terrorist” loosely, while torture was not who we were as Americans. I worried that we might be on a slippery slope of compromises. Today it’s snowballing. Avalanche watch justified.
I don’t see this administration as trustworthy. They are masters of misinformation, deceit, and dangerous propaganda. There is an overarching malevolence that I find deeply disturbing. I fear they see advantages in spurring divisiveness and social instability – that it’s in their interest to stoke already intense distrust of our institutions. At this point, our societal tinderbox seems rather conspicuous, yet they revel in flicking lit matches. We are witnessing frightening autocratic use of fear tactics against their perceived enemies and anyone they see in the way of their agenda.
I won’t ignore issues of such great importance when there is a systematic effort to deceive the public and tarnish our most critical institutions.
March 17 – Wall Street Journal (Editorial Board): “Americans won’t miss the Venezuelan and MS-13 gang members dispatched by the Trump Administration to El Salvador on the weekend. Most of them are criminals who were in the U.S. illegally. But it’s still troubling to see U.S. officials appear to disdain the law in the name of upholding it. President Trump ordered the deportation of nearly 300 alleged members of Venezuela’s Tren de Aragua gang, as well as several from MS-13, the ruthless Salvadoran gang. They were apparently deported without a hearing in an immigration court, much less a criminal conviction. The Administration didn’t release their names or their offenses. They were flown to El Salvador, where strongman Nayib Bukele had them sent immediately to his notorious gang prison. News reports say they have no access to phones or the ability to contact families. The Administration invoked the Alien Enemies Act of 1798 to justify the deportations without need for due process.”
March 21 – New York Times (Alan Feuer): “A federal judge in Washington expressed skepticism on Friday about the Trump administration’s policy of using a powerful and rarely invoked wartime statute to summarily deport immigrants from the country. The judge, James E. Boasberg, suggested at an hourlong hearing that the White House had stretched the meaning of the statute, the Alien Enemies Act, by applying it to scores of Venezuelan immigrants the administration accused of being members of a street gang and flew to El Salvador last weekend with little or no due process. The act, which was passed in 1798, is supposed to be used only in times of war or during an invasion against people in the United States from a ‘hostile nation.’ Judge Boasberg said he was concerned not only that President Trump has sought to use the law when there was neither an invasion taking place nor a declared state of war, but also that the people the government has sought to deport have no way of contesting whether they are actually gang members. ‘The policy ramifications of this are incredibly troublesome and problematic and concerning,’ Judge Boasberg said.”
President Trump has unleashed fury upon the “radical left”, “crooked” “lunatic” Judge James Boasberg, respected chief judge of the United States District Court for the District of Columbia. “We have bad judges — we have very bad judges — and these are judges that shouldn’t be allowed. I think at a certain point you have to start looking at what do you do when you have a rogue judge?” The President’s call for impeachment was joined by, of course, Elon Musk. Elon went so far as to make (maximum) $6,000 donations to Republican members of Congress that sponsored impeachment bills. Outrageous.
Question from Fox News’ Will Cain (March 19th): “Let’s start, if we might, on the decision by Judge Boasberg. Tomorrow is your deadline to answer questions. Those questions include the following: what time did the plane take off from U.S. soil, where did it leave from, what time did it leave U.S. airspace, what time did it land in a foreign country. You have four, five, six questions the judge wants answers regarding the details of those flights over the weekend. How will you respond at the Department of Justice?”
Attorney General Pam Bondi: “Our lawyers are working on this. We will answer appropriately, but what I will tell you is this judge has no right to ask those questions. You have one unelected federal judge trying to control foreign policy – trying to control the Alien Enemies Act, which they have no business presiding over and there are 261 reasons why Americans are safer now. That’s because those people are out of this country. The judge had no business, no power to do what he did… This judge had no right to do that. They’re meddling in foreign affairs, they’re meddling in our government, and the question should be why is the judge trying to protect terrorists that invaded our country over American citizens? …These activist judges are trying to control our entire federal government. They’re trying to control our money… They will not prevail because Donald Trump’s agenda is what people wanted to make America great again; to make America prosperous again; to make America safe again. They’re attacking us at all fronts, and they will not be successful.”
From the Department of Justice website: “The Attorney General represents the United States in legal matters generally, and gives advice and opinions to the President and to the heads of the executive departments of the Government when so requested.”
The lady doth protest too much – while sounding much the political hack playing fast and loose with the stature and credibility of her important position. The administration has been hankering for this fight. The Justice Department refused to answer a few straightforward questions, choosing instead to excoriate Judge Boasberg and district judges more generally. Of course, everyone wants members of the Tren de Aragua gang out of our country. But does the Alien Enemies Act of 1798 have legal legitimacy in this circumstance? Are individuals apprehended in the administration’s deportation efforts afforded even minimal due process? Is it legal for the administration to load up planes of individuals and transfer them to El Salvador’s notorious Terrorism Confinement Centre – and not so much as even provide the names of the individuals on the flights?
March 21 – New York Times (Zolan Kanno-Youngs, Hamed Aleaziz, Adam Goldman and Eileen Sullivan): “The Trump administration fired nearly the entire civil rights branch of the Department of Homeland Security on Friday, gutting a government office responsible for conducting oversight of President Trump’s immigration crackdown. The more than 100 staff members were told on Friday they would be put on leave for 60 days to find another job in the administration or be fired in May, according to five current and former government officials. Mr. Trump also closed the ombudsman for Citizenship and Immigration Services, another office responsible for scrutinizing the administration’s legal immigration policies.”
March 22 – Bloomberg (John Harney): “President Donald Trump intensified his scrutiny of the American legal system by directing Attorney General Pam Bondi to ‘review conduct’ by lawyers and firms who engage in ‘frivolous, unreasonable, and vexatious litigation’ against the US. ‘Accountability is especially important when misconduct by lawyers and law firms threatens our national security, homeland security, public safety, or election integrity,’ Trump wrote in a memorandum released late Friday.”
We’re witnessing a brazen effort to discredit the judicial branch of our government, our sacred judicial system, whose oversight of an autocratic executive branch will be the most consequential in our nation’s history.
I’m no legal expert. A so-called “constitutional crisis” is in the eye of the beholder. But if we’re not there already, it’s coming. Our Constitution is being soiled. Our sacred freedom of speech, including to express our views through protest, is under assault. Today on Truth Social, it was back to “Maggot Hagerman” and “The Fake News is the ENEMY OF THE PEOPLE.” Threats against the media are intensifying. I personally cherish the First Amendment, knowing I would be sitting in a cold jail cell in many countries.
March 21 – New York Times (Stephanie Saul): “The Trump administration moved early Friday to detain an international student at Cornell University who has led protests on its Ithaca, N.Y., campus, in what appeared to be the latest effort to kick pro-Palestinian activists out of the United States. A lawyer for Momodou Taal, a doctoral student in Africana studies, said in court papers that he had been notified by email early Friday morning that U.S. Immigration and Customs Enforcement was seeking Mr. Taal’s surrender.”
March 21 – New York Times (Chris Cameron): “President Trump escalated his threats against people who vandalize Tesla cars, musing in a social media post on Friday that those convicted of damaging or destroying the vehicles — including U.S. citizens — could be sent to notorious prison complexes in El Salvador. ‘I look forward to watching the sick terrorist thugs get 20-year jail sentences for what they are doing to Elon Musk and Tesla,’ Mr. Trump said, adding, ‘Perhaps they could serve them in the prisons of El Salvador, which have become so recently famous for such lovely conditions!’”
“Sell your Tesla” signs are legitimate protest; vandalizing property is a crime. But how could Musk, Trump and his inner circle not see this coming? Isn’t it time to recognize that this whole Elon thing poses serious risk to social stability? One of the most divisive figures in the world today, running roughshod in our Nation’s Capital. Sunglasses and a big chainsaw? Calling for judge impeachments, while donating to Republicans sponsoring impeachment legislation? The world wealthiest individual is craving to use some of his fortune to “primary” members of Congress that display even a modicum of dissent against the President’s agenda. Unelected and unconfirmed, yet seemingly unchecked power over the gamut of governmental agencies. He’s President Trump’s ultimate device for rattling the cages – exactly what society doesn’t need at this critical juncture.
March 19 – The Hill (Al Weaver): “Sen. Lisa Murkowski says that few Senate Republicans are willing to speak out against actions by the Trump administration and Elon Musk because most fear for their political lives. Murkowski, one of the foremost centrists in the GOP conference, told reporters… many of her colleagues are scared of the attacks she and others who have been willing to buck Trump and the party have faced. That is why they are unwilling to take steps that put them out of line and in the crosshairs of Trump supporters and conservatives. ‘I get criticized for what I say, and everybody else is like, ‘How come nobody else is saying anything?’ Well, figure it out, because they’re looking at how many things are being thrown at me, and it’s like, ‘Maybe I should just duck and cover,’’ Murkowski said… ‘That’s why you’ve got everybody just zip-lipped, not saying a word because they’re afraid they’re going to be taken down — they’re going to be primaried, they’re going to be given names in the media,’ she continued. ‘We cannot be cowed into not speaking up.’”
MAGA, the markets and the Supreme Court. There is today little standing in the way of the President’s unparalleled power grab blitzkrieg. There seems no hope that the President’s base will stand up and demand a different approach. It could get very interesting with the Supreme Court.
March 18 – Wall Street Journal (Jess Bravin and Jan Wolfe): “Chief Justice John Roberts decried calls from President Trump and his supporters to impeach judges who have ruled against administration policies, saying that the courts should be left to resolve legal disputes through the traditional system of litigation. ‘For more than two centuries, it has been established that impeachment is not an appropriate response to disagreement concerning a judicial decision… The normal appellate review process exists for that purpose.”
I have a difficult time believing there’s not shock and consternation for a majority of Supreme Court Justices. Surely expecting disruption, they now confront the reality of an unhinged executive branch. Has the Supreme Court ever faced such a monumental challenge in protecting the integrity of the United States Constitution and our system of separation of powers and checks and balances?
And that leaves us with the markets. In a few short weeks, sentiment abruptly shifted from confidence the President wouldn’t do anything to rattle the markets – to fear that he might not care much. In the back of people’s minds must the old (Winston Churchill) adage, “Never let a good crisis go to waste.” Financial and economic crises would offer opportunities to further consolidate executive branch power unavailable in normal circumstances.
It’s definitely a fascinating market environment. Markets rarely go straight down. Crash dynamics typically unfolded from failing rallies, often following significant post-speculative melt-up selloffs. Euphoria, sudden fear, fleeting hope, and then panic. A vulnerable stock market could nonetheless muster an end-of-the-quarter rally. And then there’s April 2nd tariff announcements. The administration would certainly prefer to get through that period without an accident. But it sure appears this unfolding incredible environment will be prone to accidents. Higher inflation may prove transitory, but the same can’t be said for instability.
For Posterity:
“Let me speak very directly, David [Westin]. We are not there yet. But every week for the last two months the risk of an attempt to impose authoritarianism in the United States has gone up. The dismissals that you mentioned (at the FTC) are one example. The lawless cutbacks of spending are another example. The impositions and threats to universities with no process, nothing of what is required in Title 6 law, is another example. The steps with respect to expelling people who are here without the process protections contained in law are another example. Assertion that if the President does it to help the country – to save the country – it can’t be illegal, is another example. The flirtation with fascist abroad such as the AfD in Germany by the vice president is yet another example. And there are many more. We have not crossed the Rubicon yet, where court orders are being defied. That hasn’t happened yet. But we’re getting much closer to that Rubicon. The so-called Overton Window of things that are seen as possible and imaginable has broadened. And, ultimately, that is going to be alarming for what America is and therefore potentially going to do grave damage to our economy and the world’s. We are not there quite yet, but I have to say what was a possible concern two months ago now seems to me to be a genuinely alarming prospect. That should disturb and worry every investor and our country’s leaders in the business and financial community, who know how much they have depended on the rule of law, should be organizing to resist what could be an extraordinarily damaging long-term change in policy. It takes decades to grow a forest and a few minutes to burn it down. Something like that is true with respect to our nation’s credibility and commitment to rule of law. I do not remember in the last 50 years a more alarming moment in terms of the approach that the U.S. government it taking to our democratic institutions.” Former Treasury Secretary Larry Summers, Wall Street Week, March 21, 2025
Fareed Zakaria (CNN, March 9, 2025): “What is your reaction, just as a Ukrainian, as a European, to what has happened in America – this transformation of policy? Do you understand it? What do you think is going on?
Former Ukraine Foreign Minister Dmytro Kuleba: “America came to Europe 108 years ago amidst the first world war. For slightly over a century, Europe forgot how to live without America. Now it’s time to remember those days. Now it’s time to learn how to live – not only on the assumption that America will not be in Europe – but also that America may openly be against Europe. But the biggest lesson that we all learn, I believe, is that there is no one you can genuinely rely on in this world in a long-term perspective. Because the moment will come when your interests and the interests of that other you had relied on will come into conflict – which will push countries to self-sufficiency to the limit which is very hard to comprehend at this point. This will be a global trend. And, of course, this will all result in the growth of China’s influence over the world. It’s regrettable to see how America dismantles [the] America-led world. But that’s the choice the people of America made by casting their votes, and we have to learn how to live with it.”
Anderson Cooper (CNN March 19, 2025): “It’s the strength of this country that we right wrongs – and that we correct injustices – or try to, at least. The horrible things that have happened to Americans from other Americans in the past, recognizing them is not a sign of weakness. It’s a sign of strength, acknowledging it and correcting it.”
Former Congressman Adam Kinzinger: “If we want to be a color-blind society… it’s important to look back at the challenges people have had to overcome. In school, we teach stories of people that have overcome challenges to do good things. I would say joining the military is a good thing. We think of the Tuskegee airmen – personal heroes of mine as pilots – they basically were told that they couldn’t even fly airplanes. Black men could not fly airplanes. They went and showed not just that they could fly them. They were one of the best performing fighter wings in the whole of World War II. It is important for a young black male or female, in challenging circumstance today, that may think they don’t have any hope, to see that story and say ‘I too could go fly for the United States Airforce – I could fly for United Airlines’… This is about showing people that may think they don’t have an opportunity to – or think they don’t qualify – and saying look, people have overcome some of the same challenges you have, and you can too. We should be celebrating that…, not spending staff time looking through and trying to hunt down the word ‘black,’ or ‘gay’, or ‘woman’ or ‘whatever.’”
Cooper: “If you suddenly label the Tuskegee airmen something like DEI, it’s implying that somehow they were given planes to fly and were incompetent, but they were black and so they were just given planes. It’s… ludicrous – it’s offensive, it’s very disturbing.”
For the Week:
The S&P500 recovered 0.5% (down 3.6% y-t-d), and the Dow rose 1.2% (down 1.3%). The Utilities slipped 0.6% (up 5.4%). The Banks rallied 2.8% (down 3.2%), and the Broker/Dealers recovered 3.7% (up 3.2%). The Transports dipped 0.2% (down 8.1%). The S&P 400 Midcaps gained 0.6% (down 5.6%), and the small cap Russell 2000 increased 0.6% (down 7.8%). The Nasdaq100 inched 0.3% higher (down 6.0%). The Semiconductors declined 0.9% (down 8.5%). The Biotechs lost 0.8% (up 1.4%). With bullion jumping another $38, the HUI gold index gained 2.7% (up 27.8%).
Three-month Treasury bill rates ended the week at 4.185%. Two-year government yields fell seven bps to 3.95% (down 29bps y-t-d). Five-year T-note yields dropped nine bps to 4.00% (down 38bps). Ten-year Treasury yields declined seven bps to 4.25% (down 32bps). Long bond yields dipped three bps to 4.60% (down 19bps). Benchmark Fannie Mae MBS yields fell seven bps to 5.51% (down 34bps).
Italian 10-year yields dropped 12 bps to 3.88% (up 36bps y-t-d). Greek 10-year yields fell 11 bps to 3.58% (up 36bps). Spain’s 10-year yields declined nine bps to 3.41% (down 35bps). German bund yields dropped 11 bps to 2.77% (up 40bps). French yields fell 10 bps to 3.46% (up 27bps). The French to German 10-year bond spread narrowed about one to 69 bps. U.K. 10-year gilt yields rose five bps to 4.71% (up 14bps). U.K.’s FTSE equities index added 0.2% (up 5.8% y-t-d).
Japan’s Nikkei 225 Equities Index rose 1.7% (down 5.6% y-t-d). Japanese 10-year “JGB” yields added a basis point to 1.52% (up 42bps y-t-d). France’s CAC40 added 0.2% (up 9.0%). The German DAX equities index slipped 0.4% (up 15.0%). Spain’s IBEX 35 equities index rallied 2.7% (up 15.1%). Italy’s FTSE MIB index rose 1.0% (up 14.2%). EM equities were mixed. Brazil’s Bovespa index jumped 2.6% (up 10.0%), and Mexico’s Bolsa index increased 0.4% (up 6.4%). South Korea’s Kospi rallied 3.0% (up 10.2%). India’s Sensex equities index surged 4.2% (down 2.0%). China’s Shanghai Exchange Index fell 1.6% (up 0.4%). Turkey’s Borsa Istanbul National 100 index sank 16.6% (down 8.0%).
Federal Reserve Credit was little changed last week at $6.712 TN. Fed Credit was down $2.188 TN from the June 22, 2022, peak. Over the past 288 weeks, Fed Credit expanded $2.986 TN, or 80%. Fed Credit inflated $3.902 TN, or 139%, over the past 645 weeks. Elsewhere, Fed holdings for foreign owners of Treasury, Agency Debt increased $1.8 billion last week to $3.304 TN. “Custody holdings” were down $45.1 billion y-o-y, or 1.3%.
Total money market fund assets fell $21.8 billion to $7.002 TN. Money funds were up $868 billion over 34 weeks (21.6% annualized) and $894 billion y-o-y (14.6%).
Total Commercial Paper jumped another $25.1 billion to $1.385 TN – the high back to 2009. CP has increased $297 billion y-t-d and $56 billion, or 4.2%, y-o-y.
Freddie Mac 30-year fixed mortgage rates increased two bps this week to 6.67% (down 20bps y-o-y). Fifteen-year rates gained three bps to 5.83% (down 38bps). Bankrate’s survey of jumbo mortgage borrowing costs had 30-year fixed rates up three bps to 6.82% (down 37bps).
Currency Watch:
For the week, the U.S. Dollar Index gained 0.4% to 104.088 (down 4.1% y-t-d). For the week on the upside, the Norwegian krone increased 1.0%, the Swiss franc 0.3%, the Brazilian real 0.2%, and the Canadian dollar 0.1%. On the downside, the Mexican peso declined 1.5%, the South Korean won 0.9%, the Australian dollar 0.8%, the euro 0.6%, the Japanese yen 0.5%, the New Zealand dollar 0.2%, the South African rand 0.2%, the Singapore dollar 0.1%, and the British pound 0.1%. The Chinese (onshore) renminbi declined 0.20% versus the dollar (up 0.66% y-t-d).
Commodities Watch:
The Bloomberg Commodities Index increased 0.4% (up 6.6% y-t-d). Spot Gold added 1.3% to $3,022 (up 15.2%). Silver reversed 2.3% lower to $33.0328 (up 14.3%). WTI crude rallied $1.10, or 1.6%, to $68.28 (down 5%). Gasoline rose 2.2% (up 9%), while Natural Gas retreated 3.0% to $3.98 (up 10%). Copper surged 4.4% (up 27%). Wheat gained 2.3% (up 1%), and Corn surged 4.2% (up 1%). Bitcoin was little changed at $84,230 (down 10%).
Trump Administration Watch:
March 16 – Bloomberg (María Paula Mijares Torres): “Treasury Secretary Scott Bessent, a former hedge fund manager, said he’s not worried about the recent downturn that’s wiped trillions of dollars from the equities market as the US seeks to reshape its economic policies. ‘I’ve been in the investment business for 35 years, and I can tell you that corrections are healthy, they are normal,’ Bessent said… ‘I‘m not worried about the markets. Over the long term, if we put good tax policy in place, deregulation and energy security, the markets will do great.’”
March 20 – Associated Press (Collin Binkley and Chris Megerian): “President Donald Trump plans to sign an executive order Thursday calling for the shutdown of the U.S. Education Department, according to a White House official, advancing a campaign promise to eliminate an agency that’s been a longtime target of conservatives… Trump has derided the Department of Education as wasteful and polluted by liberal ideology. However, finalizing its dismantling is likely impossible without an act of Congress, which created the department in 1979.”
March 18 – Axios (Andrew Solender): “Just hours after President Trump called for the impeachment of a federal judge who ruled against his deportation of hundreds of Venezuelans over the weekend, House Republicans introduced a measure to do just that. GOP lawmakers have unleashed an unprecedented flood of long-shot impeachment articles aimed at federal judges who are standing in the way of the president’s agenda. James Boasberg, chief judge of the D.C. District Court, is at least the fifth federal judge who is facing a House GOP impeachment attempt after issuing a ruling unfavorable to the administration… Rep. Brandon Gill (R-Texas) said… he is introducing articles of impeachment against Boasberg, arguing he ‘overstepped his authority, compromised the impartiality of the judiciary, and created a constitutional crisis.’”
March 19 – New York Times (Maggie Haberman, Theodore Schleifer and Annie Karni): “Elon Musk has made the maximum allowable donation to Republican members of Congress who support impeaching federal judges who are impeding actions taken by President Trump… Mr. Musk has given what had been until recently the legal maximum hard-dollar donation — $6,600 — to the campaigns of seven Republicans who have either endorsed judicial impeachments or called for some form of ‘action’ in response to recent rulings against the Trump administration, including a weekend decision by Judge James E. Boasberg of Federal District Court in Washington.”
March 20 – Axios (Alex Isenstadt): “Elon Musk’s political action committee is offering Wisconsin voters $100 to sign a petition expressing their opposition to ‘activist judges,’ a cause that President Trump is pressing as judges block or delay several parts of his agenda. The move reflects how Musk is throwing his considerable wealth behind Trump’s priorities — including an upcoming election in Wisconsin for a crucial seat on the state’s Supreme Court.’”
March 17 – Bloomberg (Philip Heijmans): “President Donald Trump’s move to close the agency that oversees Voice of America and Radio Free Asia has drawn praise in China and Cambodia that have long been critical of US media outlets. Former Cambodian Prime Minister Hun Sen praised Trump for combating fake news with shutting down the US Agency for Global Media. China’s state-run Global Times used an editorial to celebrate the closing of VOA, which it called a ‘lie factory’ for ‘stirring up conflicts, inciting social divisions, and even participating in regime change efforts.’”
March 17 – Bloomberg (Olga Kharif): “World Liberty Financial, the crypto project promoted by President Donald Trump, has completed its second set of token sales and raised a total of $550 million in gross proceeds… A company affiliated with Trump receives 75% of net revenue as a fee, including the proceeds of token sales, according to the offering document for World Liberty’s initial token sale.”
Trade War Watch:
March 20 – Politico (Carlo Martuscelli): “Europe needs to ‘stand ready for anything’ including attempts to ‘use tariffs as a weapon’ and ‘blackmail’ European Central Bank President Christine Lagarde said… Answering a question from lawmakers about the effects of U.S. President Donald Trump’s policies in unusually direct language, the central bank chief said that ‘the strategy of others to consolidate, weaken, strengthen, repatriate manufacturing, use tariffs as a weapon, blackmail… should reinforce our determination to be strong.’ Lagarde was addressing the European Parliament’s Economic and Monetary Affairs Committee…”
March 19 – Politico (Jacob Parry): “There may be a more politically incendiary moment for the European Union to crack down on Big Tech. But it’s hard to think of one. Starting Wednesday, the European Commission is staring down a series of deadlines to decide whether Apple, Meta and Google are in breach of the EU’s digital competition laws; decisions which, at least on paper, could see the companies hit with fines of up to 10% of their worldwide revenues. The timing’s awkward. In recent weeks, the bloc’s Digital Markets Act has come under sustained fire from United States President Donald Trump, who said it amounts to ‘overseas extortion’ of American companies.”
March 19 – Politico (Gregorio Sorgi, Jacopo Barigazzi and Giovanna Faggionato): “United States arms-makers are being frozen out of the European Union’s massive new defense spending plan, which aims to splash the cash for EU and allied countries, according to defense spending plans released Wednesday. Also left out — for now — is the United Kingdom. ‘We must buy more European. Because that means strengthening the European defense technological and industrial base,’ said Commission President Ursula von der Leyen in announcing the Readiness 2030 program. In a bid to strengthen ties with allies, Brussels involved countries like South Korea and Japan and the European Free Trade Association (EFTA) in its program that could see as much as €800 billion spent on defense.”
March 15 – Financial Times (Thomas Graham): “Half of all Mexican exports to the US last year did not arrive under North America’s free trade deal and therefore still face an immediate risk of 25% tariffs imposed by President Donald Trump… Most of those goods could meet USMCA trade deal terms by filing extra paperwork, but about 10% of Mexico’s exports to the US — worth about $50bn — face a struggle to comply, leaving companies with a dilemma: scramble to switch their supply chains, or wait and see if the tariffs stick.”
March 17 – Associated Press (Vanessa Gera): “Ivan Hansen, a retired Danish police officer, loaded up his basket at the supermarket, carefully checking each product to avoid buying anything made in the United States. No more Coca-Cola, no more California Zinfandel wine or almonds. The 67-year-old said it’s the only way he knows to protest U.S. President Donald Trump’s policies. He’s furious about Trump’s threat to seize the Danish territory of Greenland, but it’s not just that. There are also the threats to take control of the Panama Canal and Gaza. And Trump’s relationship with Elon Musk, who has far-right ties… ‘Trump really looks like a bully who tries in every way to intimidate, threaten others to get his way… I will fight against that kind of thing.’”
Canada Friend and Ally Watch:
March 20 – Financial Times (Ilya Gridneff): “Mark Carney, Canada’s new prime minister, is… expected to call a federal election for April 28. Carney will announce the poll less than a fortnight after replacing Justin Trudeau as head of Canada’s Liberal party, which has seen its popularity soar in response to threats of annexation and punitive tariffs from US President Donald Trump. ‘April 28 is the likely date,’ a senior government official said… ‘But it will be confirmed officially when the governor-general agrees.’ The election campaign will pit Carney against Conservative party leader Pierre Poilievre.”
March 17 – Wall Street Journal (Paul Vieira): “Canada is ready to talk with the U.S. about the two countries’ economic and security ties but not until the Trump administration ceases referring to its northern neighbor as the 51st state, Prime Minister Mark Carney said. ‘They’re disrespectful, they’re not helpful, and they will have to stop,’ Carney said…, following a day of meetings in two countries with French President Emmanuel Macron, King Charles III and U.K. Prime Minister Keir Starmer. ‘What we’re looking for with respect to the United States is to have a more comprehensive discussion of and negotiation of our overall commercial and security relationship, and when the United States is ready to have that conversation, we’re more than ready to sit down.’”
March 17 – Politico (Victor Goury-Laffont): “New Canadian Prime Minister Mark Carney began his first trip overseas since taking office by saying his country needed to work with ‘reliable allies,’ a clear shot at U.S. President Donald Trump. ‘It’s more important than ever that Canada reinforces its ties with our reliable allies like France,’ Carney said while appearing alongside French President Emmanuel Macron in Paris at the Elysée Palace. ‘We know that economic collaboration, not confrontation, is the way to build strong economies.’ Carney appeared to emphasize the word ‘reliable,’ looking directly at Macron as he said the word in French.”
March 16 – BBC (Sam Gruet): “Made in Canada. Three words that are now a common presence on Canadian shelves, after Donald Trump’s tariffs sparked a trade war with the US’s northern neighbour. In Canada the economic measures against it have been met with a wave of patriotism, with some consumers and businesses boycotting American products. Others with operations in the US face a choice – ride out the uncertainty or bring their enterprise back home. ‘Right now, I’m a little angry. I don’t want to invest in American companies,’ says Joanna Goodman, owner of Au Lit Fine Linens, a Toronto-based bedding and nightwear company.”
March 19 – Wall Street Journal (Ryan Dubé): “As Canada’s new fentanyl czar, Kevin Brosseau is tasked with stopping a problem that many people in Canada say has been overblown by President Trump. The former Canadian law-enforcement official said he wants to halt the opioid’s flow not only to address U.S. concerns but to end a deadly domestic scourge. ‘Getting the number to zero is in fact a goal, and should be our goal,’ Brosseau said… ‘If it’s 1 pound, 10 pounds, we all know the amount of deaths that could possibly represent’… Most Canadians see Trump’s claim as a smokescreen to justify a trade war against a longtime U.S. ally he has repeatedly talked about annexing through ‘economic force.’”
March 20 – Bloomberg (Erik Hertzberg): “Optimism among Canada’s small and medium-sized firms fell to the lowest level in at least a quarter-century after the US started a trade war with the country, according to the Canadian Federation of Independent Business. The CFIB’s Business Barometer index fell to 25 this month, according to a flash poll… That’s the lowest reading on record in data back to 2000.”
March 18 – Reuters (Promit Mukherjee): “Canada’s annual inflation rate showed a surprise jump to 2.6% in February, surpassing expectations as a sales tax break that ended in the middle of last month pushed prices higher amid an already broad-based increase… This is the first time in seven months that the rate of increase of consumer prices has crossed the 2% mark, the mid-point of the Bank of Canada’s target range of 1% to 3%. In January, inflation was at 1.9%. The February inflation figure was the highest in eight months…”
New World Disorder Watch:
March 18 – Bloomberg (Arne Delfs, Michael Nienaber and Kamil Kowalcze): “Chancellor-in-waiting Friedrich Merz said Germany’s move to unlock billions of euros in military spending should be seen as a ‘first great step’ toward the creation of a broad European defense community including non-EU nations like the UK and Norway… Merz… said the sweeping measures are urgently needed because the political order that has brought freedom, peace and prosperity to Germany is under threat and any ‘peace dividend’ has ‘long since been exhausted.’ ‘Our decision today will not only determine our own defense capabilities in the coming years, perhaps even the coming decades,’ Merz said…”
March 20 – Financial Times (Henry Foy and Ben Hall): “Europe’s biggest military powers are drawing up plans to take on greater responsibilities for the continent’s defence from the US, including a pitch to the Trump administration for a managed transfer over the next five to 10 years. The discussions are an attempt to avoid the chaos of a unilateral US withdrawal from Nato, a fear sparked by President Donald Trump’s repeated threats to weaken or walk away from the transatlantic alliance that has protected Europe for almost eight decades. The UK, France, Germany and the Nordics are among the countries engaged in the informal but structured discussions…”
March 17 – Bloomberg (William Horobin): “US President Donald Trump’s aggressive trade policies have abruptly set the world onto a path of slower growth and higher inflation that could worsen notably if tensions escalate, the OECD said. The Paris-based club of 38 rich countries cut its outlook for most members and predicted the pace of global expansion to slow to 3.1% this year and 3% in 2026 as barriers restrain commerce and surging uncertainty holds back business investment and consumer spending. Nations currently in the eye of the trade storm may see even sharper decelerations, with Canada’s growth rate tumbling to less than half the OECD’s December prediction, Mexico entering a recession, and the annual expansion in the US wilting to 1.6% next year — the weakest since 2011 aside from the initial Covid pandemic hit suffered in 2020.”
March 20 – Financial Times (Lucy Fisher and George Parker): “Sir Keir Starmer has said that the ‘coalition of the willing’ is working to establish a military plan so it can ‘react straightaway’ to defend any peace deal that Ukraine secures with Russia. The UK prime minister said senior armed forces figures from around 30 nations involved in the coalition to support Kyiv had gathered on Thursday to pivot from ‘political concept to military plans’. The meeting followed a call of political leaders convened by London last weekend, and an initial meeting of chiefs of defence staff in Paris last week.”
March 17 – Financial Times (George Parker, Lucy Fisher and Henry Foy): “Downing Street… said it expected ‘more than 30’ countries to join a coalition to help secure a lasting peace in Ukraine, though UK officials admitted many would not be willing to put boots on the ground. Britain, France and Australia have signalled they are ready to send troops to help enforce a ceasefire in Ukraine, but all have warned any peace could only be guaranteed if the US provided a military ‘backstop’. Denmark and Sweden have also said they would be willing to contribute forces in some form to any agreed peacekeeping operation in Ukraine, including the potential deployment of troops.”
March 16 – Bloomberg (Mark Schroers): “US President Donald Trump’s policies are causing more uncertainty for the economy than there was during Covid, European Central Bank Vice President Luis de Guindos told the Sunday Times. ‘We need to consider the uncertainty of the current environment, which is even higher than it was during the pandemic… What we’re seeing is that the new US administration isn’t very open to continuing with multilateralism, which is about co-operation across jurisdictions and finding common solutions for common problems. This is a very important change, and a big source of uncertainty.’”
March 19 – Associated Press (Stefanie Dazio and Tara Copp): “Questions are mounting in Canada and in Europe over whether big-ticket purchases of high-end U.S. weaponry, such as the F-35 Joint Strike Fighter, are still a wise strategic choice for Western countries worried about their investment in U.S. defense technology. In less than two months, U.S. President Donald Trump has upended decades of foreign policy. He has left NATO members questioning whether Washington will honor the trans-Atlantic alliance’s commitment to defend each other, if other European countries are attacked by Russia. He’s also made repeat overtures to Moscow and suspended most U.S. foreign aid. That could impact foreign sales of the Lockheed Martin-produced F-35 and other advanced U.S. jets like the F-16.”
Ukraine War Watch:
March 19 – Wall Street Journal (Alexander Ward, Alan Cullison and Matthew Luxmoore): “President Trump insisted Russia would be the easier partner on the path to peace with Ukraine. But his Tuesday phone call with Russian President Vladimir Putin only underscored that the Kremlin is so far the bigger obstacle. The question now facing Trump is whether to apply real pressure on Putin to make concessions or try to wring more compromises out of Kyiv than he already has. In his call with Trump, Putin agreed to halt attacks on Ukraine’s energy infrastructure for a month and to further negotiations toward a permanent cease-fire. But it was far less than Trump aimed for, and certainly less than the monthlong unconditional pause Kyiv accepted earlier. After the call, Moscow said… Ukraine would have to agree to curtail its military mobilization and stop rearming, lengthening the list of Russian conditions for a deal. Trump said… Tuesday night that Putin didn’t ask for a pause in military assistance during their call.”
March 17 – Bloomberg (Natalia Drozdiak and Greg Sullivan): “President Donald Trump said the US and Russia are already talking about dividing ‘assets’ as part of a push to end the fighting in Ukraine, the latest sign that he may be preparing to sacrifice Kyiv’s interests when he speaks with Vladimir Putin… One objective of the call is expected to be getting the Russian president to agree to a 30-day ceasefire that Trump proposed this month and Ukraine has agreed to. Putin has been noncommittal so far, saying he accepted the idea in principle but wants certain conditions to be met.”
March 18 – Bloomberg (Ellen Milligan): “The UK and European Union are in talks to accelerate arms shipments to Ukraine ahead of a potential full ceasefire, Britain’s foreign secretary told Bloomberg shortly before Vladimir Putin agreed to a limited truce. David Lammy said he discussed the possibility of sending more military support to Ukraine before any broad cessation in fighting is implemented at a meeting in London with the EU’s top diplomat… ‘Of course it’s our intention to put Ukraine in the strongest possible position militarily and economically,’ the foreign secretary told Bloomberg… ‘We want peace to prevail but we get peace through strength and that means putting Ukraine in the strongest possible position to repel any prospects of the war beginning again.’”
March 19 – Politico (Nicholas Vinocur): “Russian President Vladimir Putin has revealed his real intentions in Ukraine by bombing civilian energy infrastructure after telling Donald Trump that Moscow would stop such attacks, said Finnish President Alexander Stubb. The only real solution to deter Moscow, Stubb told POLITICO on Wednesday, was to ‘militarize Ukraine to its teeth.’ The Finnish president was speaking after a meeting with Ukrainian President Volodymyr Zelenskyy in Helsinki…”
U.S./Russia/China/Europe Watch:
March 21 – Bloomberg (Shirley Zhao): “A pro-Beijing newspaper has called on CK Hutchison Holdings Ltd. to pull out from an agreement to sell its ports on the Panama Canal to a group led by BlackRock Inc., marking an escalation of a pressure campaign on billionaire Li Ka-shing over the deal. The transaction will damage China’s national security and development interests, which directly violates Hong Kong’s laws on safeguarding national sovereignty, security and development interests, the Ta Kung Pao paper said… CK Hutchison is expected to sign an agreement on the sale of its two Panama ports by April 2.”
March 15 – Associated Press (Christopher Bodeen): “China has lashed out at accusations it is endangering maritime safety made by top diplomats from the Group of 7 industrialized democracies in a joint statement, saying the G7 members are ‘filled with arrogance, prejudice and malicious intentions.’ Even for China’s generally overheated diplomatic language, the statement… was unusually vitriolic… In the Friday statement that sparked the Chinese response, the G7 said, ‘We condemn China’s illicit, provocative, coercive and dangerous actions that seek unilaterally to alter the status quo in such a way as to risk undermining the stability of regions, including through land reclaimations, and building of outposts, as well as their use for military purpose.’”
March 21 – Financial Times (Demetri Sevastopulo and Felicia Schwartz): “The US has imposed sanctions on two Chinese petrochemicals groups for allegedly importing Iranian crude oil, in the latest salvo of President Donald Trump’s ‘maximum pressure’ campaign on the Islamic republic.”
Taiwan Watch:
March 17 – Bloomberg (Yian Lee and Foster Wong): “China held what it said were new ‘military exercises’ around Taiwan, linking them to recent US moves backing the self-ruled archipelago and the actions of what it called independence forces. Chinese Foreign Ministry spokesperson Mao Ning said… the People’s Liberation Army was making ‘a resolute response to foreign connivance’ and ‘a serious warning to Taiwan separatist forces’… Mao pointed to ‘a series of wrong actions’ by Washington, including the State Department in February deleting a phrase from a fact sheet saying the US does ‘not support Taiwan independence.’”
March 17 – Bloomberg (Sudhi Ranjan Sen): “Taiwan expects President Donald Trump’s administration to continue to support it — along with supplies of US weaponry — in case of hostilities with China, a senior Taiwanese official said… ‘We need the US support to sell us the most advanced weapons, and also to help train our soldiers and they are doing that,’ Szu-chien Hsu, deputy secretary general of Taiwan’s National Security Council… told Bloomberg… ‘We don’t expect the US or anyone else to fight our war, we will fight our own war,’ he said.”
March 19 – Bloomberg (Yian Lee): “Taiwan identified 2027 as the potential year for a Chinese invasion for the first time in its annual military drills, as concerns grow on the self-ruled island about tensions with Beijing. The Taiwanese Defense Ministry unveiled the date in a document released Tuesday to brief lawmakers on upcoming war games simulating an attack by the Chinese military. The exercises will also double in length to ten days this summer, reflecting an increased emphasis on military preparedness…”
Market Instability Watch:
March 18 – Reuters (Denitsa Tsekova and Justina Lee): “One of the simplest hedge-fund strategies is misfiring this year as once-reliable trends, like betting on Big Tech and the outperformance of the US economy, crater en masse. Momentum investing, which buys up the market winners and sells the losers, has been swept up in the tariff-fueled volatility assailing global investors in 2025. That’s a blow to trend-chasing quants spreading their bets across a slew of assets — and their hedge-fund peers more broadly, who tend to ramp up exposures to winning trades in the good times, while curtailing risk in the bad times. As uncertainty has mounted over trade policy and the strength of the US economy, trend-following hedge funds… are down 4.3% this year, according to… Societe Generale SA. That’s the second-worst start since 2014.”
March 17 – Bloomberg (Claire Ruckin, Eleanor Duncan and Rachel Graf): “Companies in both Europe and the US are shelving plans to tap the riskiest corner of the loan market after US President Donald Trump’s trade wars triggered economic uncertainty… The withdrawn deals are the first signs of souring sentiment among Europe’s leveraged loan market this year, and follow a spate of pulled transactions in the US as tariffs undermine a previously insatiable demand for credit. Robust inflows into credit funds… had led to a feeding frenzy in M&A-starved leveraged loan markets. With a deluge of investor cash chasing too few deals, companies had been able to slash pricing on their existing debt. But now the volatility is allowing investors to push back on private equity-owned borrowers — and demand extra compensation to finance deals. The average margin for new issue leveraged loans was 323 bps over the benchmark last week… That compares with 287 bps over the benchmark in late January.”
March 18 – Reuters (Sagarika Jaisinghani and Michael Msika): “Investors have slashed holdings of US equities by the most on record, according to Bank of America Corp.’s latest survey… Fund managers reported being about 23% underweight in US stocks — a plunge of 40 percentage points from the previous survey. It’s a dramatic shift that shows how quickly traders have ditched their optimism about American markets with the S&P 500 tumbling some 8% from an all-time high in February. ‘Peak US exceptionalism is reflected in record rotation out of US stocks,’ strategist Michael Hartnett wrote…”
March 18 – Financial Times (Harriet Clarfelt): “Investors have poured $22bn into short-term US government debt this year after concerns over Donald Trump’s economic and trade policies set off a race for haven assets and sent stocks tumbling. Net inflows into short-dated Treasury funds hit about $21.7bn between early January and March 14, according to EPFR data… Flows into long-term government bond funds were also positive for the quarter to date, but totalled a much smaller $2.6bn. The cascade of money into shorter-dated government debt comes as investors have sought shelter from a sell-off in riskier assets…”
Global Credit and Financial Bubble Watch:
March 20 – Wall Street Journal (Paul Hannon): “Governments in rich countries are set to issue a record $17 trillion in bonds this year as the higher cost of refinancing existing debts continues to push their interest bills higher, the Organization for Economic Cooperation and Development said… The rise in issuance comes as many central banks continue to sell bonds they acquired during the years after the global financial crisis, when they struggled to raise inflation… Households and foreign investors have stepped in to take up the slack, but the OECD warned those buyers are more likely to demand higher yields as geopolitical tensions and trade uncertainties mount.”
March 20 – Bloomberg (Olivia Fishlow, Ellen Schneider and Silas Brown): “Private credit funds are grinding down margins and cranking up leverage to win business over their liquid peers, as trade wars and geopolitical uncertainty suppress corporate deals… Private credit deals generally offer a premium on spread for illiquidity. But the availability of capital has driven down spreads from peak underwriting times… All options are on the table for private credit lenders. Often, they’re willing to add more leverage, offer payment-in-kind toggles to allow borrowers to defer cash interest payments and accept dividend recapitalizations.”
March 18 – Bloomberg (Amanda Albright): “Universities in the US are facing higher risk ‘across the sector’ because of moves by the Trump administration, according to Moody’s…, which lowered its outlook for the US higher education sector to negative from stable. Moody’s analysts said… recent and potential federal policy changes ‘create a more difficult operating environment for colleges and universities.’ The outlook reflects the ratings company’s view of credit fundamentals in the US higher education sector over the next 12 months and is separate from the outlook for individual schools. The Trump administration is canceling $400 million in federal grants and contracts to Columbia University…”
March 17 – Bloomberg (Amanda Albright and Elizabeth Rembert): “America’s most prestigious colleges are rushing to the debt market at the fastest pace on record, locking in financing while they can to pay for campus projects or refinance debt against a backdrop of tax and funding threats. Municipal bond sales for higher education are up more than 40% so far in 2025 compared to the same period a year earlier, reaching nearly $10 billion and eclipsing the prior record start to a year in 2017…”
March 17 – Bloomberg (Aisha S Gani): “Klarna Group Plc is partnering with Walmart Inc.-backed OnePay to offer buy-now-pay-later to US shoppers, replacing Affirm as the retail giant’s fast credit option. Klarna will be available via finance app OnePay at online and physical checkouts of Walmart… The tie-up comes days after Klarna filed publicly for a US initial public offering in what could be one of the year’s biggest financial company listings. Klarna is seeking to raise at least $1 billion and is targeting a valuation of more than $15 billion in the listing…”
AI Bubble Watch:
March 18 – Financial Times (June Yoon): “Retaliation seemed certain. When the US tightened its grip on advanced artificial intelligence technologies in January — blocking China’s access to advanced AI chips and locking proprietary models behind trade barriers — the response appeared predictable. China would build its own walls, guard its breakthroughs and double down on secrecy. Instead, China is doing something unexpected: it is giving away its most advanced AI models. In recent weeks, Chinese tech groups including Alibaba, Baidu and Tencent have been flooding the market with powerful AI models. But in an industry where secrecy is the norm, the real shock is their openness — these models are free to download, modify and integrate… For Beijing, this strategy could be a powerful weapon in the US-China tech war. US AI companies, built on monetisation through enterprise licensing and premium services, could find themselves in a race to the bottom — where AI is abundant but profits are elusive.”
March 18 – New York Times (Meaghan Tobin and Claire Fu): “Since the founder of the Chinese artificial intelligence start-up DeepSeek shook hands with Xi Jinping, China’s top leader, last month, officials around the country have been racing to show how they are using the company’s technology. Courthouse officials are using DeepSeek to draft legal judgments within minutes. Doctors at a hospital in Fuzhou, in eastern China, are using it to propose treatment plans. In Meizhou, a city in southern China, it is DeepSeek that answers a government help line… The enthusiastic embrace of the technology by China’s bureaucracy reflects, in part, what often happens when Mr. Xi, China’s most dominant leader in decades, puts his stamp of approval on something.”
March 19 – Bloomberg (Mark Niquette): “President Donald Trump is all in on artificial intelligence and the data centers that power it — but his tariffs threaten to pile new costs on the US businesses spending hundreds of billions to build them. Data centers are booming by any measure, as tech giants from Microsoft Corp. to Amazon.com Inc. race each other – and China – for AI leadership. The industry now contributes a healthy chunk of US economic growth. But the centers have to be equipped once they’re built, and much of the hardware comes from abroad, so trade wars could throw a wrench in the works.”
Bubble and Mania Watch:
March 21 – Bloomberg (Esha Dey): “In a stock market battered by trade turmoil and growing fears of an economic slowdown, retail investors are doubling down, undeterred as their losses mount. Individual traders pumped more than $12 billion into US equities in the week ending March 19, retail-trading data from JPMorgan Chase & Co. showed. The pace of buying was significantly higher than the group’s 12-month average, according to Emma Wu, a global equity derivatives strategist at the bank.”
March 18 – Bloomberg (Ryan Vlastelica): “Meta Platforms Inc. tumbled into negative territory for the year on Tuesday, becoming the last of the so-called Magnificent Seven stocks to lose its year-to-date gain… Tech has come under broad-based pressure this year as the economic outlook has been roiled by the Trump administration’s policies on tariffs and questions about the direction of the AI trade. The Magnificent Seven stocks — Apple Inc., Microsoft Corp., Nvidia Corp., Amazon.com Inc., Tesla Inc., Alphabet and Meta — are seen as particular beneficiaries of AI.”
March 16 – Wall Street Journal (Matt Grossman): “The stock-market correction in recent weeks is more than a potential symptom of a slumping economy. It could cause a slump… As of 2022, families in the top 10% of income, on average, each owned about $2.1 million of stocks, about 32% of their net worth… In 2010, stocks made up about 26% of average net worth for this group. Over the past four years, this group of top-10% earners has boosted spending by 58%. It is not just the best-off who are pouring into stocks. Vanguard and Fidelity report record participation and contributions to their 401(k) plans for wage earners. At the end of last year, 43% of American households’ financial assets were in stocks, the highest share ever…”
March 17 – Bloomberg (Sidhartha Shukla): “US Bitcoin exchange-traded funds recorded their longest run of weekly net outflows since listing in January last year as US President Donald Trump’s tariffs drove a wider retreat from riskier assets. Investors pulled over $5.5 billion in total from the group of 12 ETFs over the past five weeks…”
March 19 – Bloomberg (Claire Ruckin): “Private equity firms are called that because they own stakes in the companies they buy. Today, this assumption is looking ever more outdated. As buyout funds struggle to sell businesses in a moribund M&A market… many are turning to cash-rich credit investors for money to pay dividends to themselves and their backers. A few are getting back as much as they first invested, if not more, in effect leaving them with little or no equity in some of their biggest companies. Already this year, more than 20 businesses in the US and Europe have borrowed to make payouts to their owners, according to Bloomberg-compiled data, meaning they’ve less financial ‘skin in the game’ if things ever go sour.”
March 15 – Yahoo Finance (Claire Boston): “Florida’s pandemic-era housing boom is finally starting to fade. For-sale inventory in the state has reached the highest levels on record… In many parts of the state, prices are starting to fall. The turning market comes as migration to the Sunshine State slows, and a combination of hurricane fears, rising insurance and tax bills, and a steady supply of new construction has given buyers more leverage… ‘Inventory and time on market has been dramatically increasing,’ said Ben Grieco, a real estate agent in… Port Charlotte. ‘It’s not like buyers have left by any means, but there’s just so much to choose from that it’s really pushing prices down.’ Listings across the state usurped pre-pandemic levels in January… As of last month, there were more than 168,000 homes active on the market.”
March 17 – Wall Street Journal (Jean Eaglesham and Nicole Friedman): “Condominium owners across the country are facing a paralyzing problem: They can’t sell their properties because of a fast-growing and mostly secret mortgage blacklist. Real-estate agent Paul Gangi was days away from closing a sale of his listing in Shadow Ridge, a 440-unit townhouse and condo complex in Ventura County, Calif., in December. That is when his phone rang. ‘I got a panicked call from the lender saying, ‘Sorry, we’ve just found out Shadow Ridge has been blacklisted,’’ he said. The buyer tried several other options for getting a loan, without success, and the sale collapsed. The blacklist is maintained by Fannie Mae and includes condo associations that the mortgage finance giant thinks don’t have adequate property insurance or need to make critical building repairs.”
De-globalization Watch:
March 20 – Bloomberg: “China’s imports of US cotton, cars and some energy products all plunged in the first two months of the year after President Donald Trump started imposing tariffs and Beijing retaliated. In a prelude to what could be widespread disruption to global trade, Chinese purchases of cotton fell almost 80% from a year earlier… Imports of large-engined cars were down nearly 70%, while purchases of crude oil and liquefied natural gas dropped more than 40%. All these goods were subject to Chinese retaliatory tariffs either in February or March.”
March 21 – Bloomberg: “China plans to add to its strategic reserves of key industrial metals this year, an effort to boost the resilience of critical minerals supply at time when energy-transition demand is increasing and geopolitical tensions are running high. Cobalt, copper, nickel and lithium are among the metals the government plans to purchase…”
Inflation Watch:
March 17 – Associated Press (Alex Veiga and Mae Anderson): “Shopping for a new home? Ready to renovate your kitchen or install a new deck? You’ll be paying more to do so. The Trump administration’s tariffs on imported goods from Canada, Mexico and China — some already in place, others set to take effect in a few weeks — are already driving up the cost of building materials used in new residential construction and home remodeling projects. The tariffs are projected to raise the costs that go into building a single-family home in the U.S. by $7,500 to $10,000, according to the National Association of Home Builders.”
Federal Reserve Watch:
March 20 – Yahoo Finance (Jennifer Schonberger and Ben Werschkul): “President Trump once again turned up the pressure on the Federal Reserve, saying… on social media that the central bank would ‘be much better off’ lowering interest rates as tariffs go into effect… The president has promised to unveil ‘reciprocal’ tariffs on many countries on April 2, which he has taken to calling ‘liberation day.’ ‘The Fed would be MUCH better off CUTTING RATES as U.S.Tariffs start to transition (ease!) their way into the economy,’ Trump said in his post on Truth Social. ‘Do the right thing. April 2nd is Liberation Day in America!!!’”
March 19 – Bloomberg (Jonnelle Marte): “For weeks the US economic picture has been darkening. If Wednesday was an opportunity for Federal Reserve Chair Jerome Powell to raise the alarm, he took a hard pass… Powell downplayed mounting growth concerns and the price hits that could be on the way from President Donald Trump’s aggressive trade war. He even revived a once-abandoned term to say the inflationary impact of tariffs is likely to be transitory. ‘As I’ve mentioned, it can be the case that it’s appropriate sometimes to look through inflation if it’s going to go away quickly without action by us, if it’s transitory,’ Powell said. He called that scenario the ‘base case,’ but then hedged, saying officials ‘really can’t know’ if the effect will be temporary.”
March 18 – Wall Street Journal (Nick Timiraos): “Not long ago, it looked like Jerome Powell’s final test as Federal Reserve chair would be to stick the soft landing. Now, with about one year left in his term, he faces a serious complication: navigating a trade war that threatens to push prices up while weakening the economy. During a seven-year tenure that included Donald Trump’s first trade war, a pandemic, historic inflation and high-profile bank failures, Powell’s final act also unfolds with an imperative to preserve the institution’s apolitical DNA that protects its autonomy in setting interest rates. Fed policymakers are alternately referred to as inflation-fighting ‘hawks’ or labor-market defending ‘doves.’ Right now, Powell looks more like a duck—calm on the surface while constantly paddling beneath murky waters.”
March 17 – Associated Press (Christopher Rugaber): “President Donald Trump… nominated Michelle Bowman to oversee the Federal Reserve’s financial regulatory efforts, a move that could lead to looser rules for large banks. Bowman was appointed by Trump in 2018 to serve on the Fed’s governing board. She replaces Michael Barr as the Fed’s Vice Chair for Supervision, after Barr stepped down last month to avoid a legal fight that could have ensued had Trump carried out his threat to fire him. Barr, however, stayed on the seven-member Fed board, forcing Trump to pick from one of the existing governors.”
U.S. Economic Bubble Watch:
March 20 – Reuters (Lucia Mutikani): “The U.S. current account deficit contracted in the fourth quarter, but the improvement could be temporary as goods imports surged to a record…, driven by businesses preemptively buying foreign merchandise to avoid tariffs. The… current account deficit, which measures the flow of goods, services and investments into and out of the country, narrowed $6.3 billion, or 2.0% to $303.9 billion. Data for the third quarter was revised to show the deficit widening to a record high of $310.3 billion.”
March 20 – Associated Press (Matt Ott): “Slightly more Americans applied for unemployment benefits last week, but layoffs remain historically low. U.S. jobless claims filings rose by 2,000 to 223,000 for the week ending March 15… That’s just less than the 224,000 new applications analysts forecast. Weekly applications for jobless benefits are considered a proxy for layoffs, and have remained mostly in a range between 200,000 and 250,000 for the past few years.”
March 20 – CNBC (Diana Olick): “Sales of previously owned homes in February rose 4.2% from January to 4.26 million units on a seasonally adjusted, annualized basis… Sales were 1.2% lower compared with February of last year… Inventory at the end of February stood at 1.24 million units, an increase of 17% year over year, but still just a 3.5-month supply at the current sales pace. A six-month supply is considered balanced between buyer and seller… That tight supply is keeping pressure on prices. The median price of a home sold in February was $398,400, up 3.8% from the same time last year… All four geographical regions of the country saw price increases. First-time buyers edged back into the market, making up 31% of February sales compared with 26% the year before. Investors, however, pulled back, accounting for just 16% of sales, down from 21% last year. All-cash sales, however, remained relatively steady at 32% of sales…”
March 18 – Reuters (Lucia Mutikani): “U.S. single-family homebuilding rebounded sharply in February…, but rising prices for raw materials because of tariffs threaten the nascent housing market and manufacturing recovery… Single-family housing starts… surged 11.4% to a… annual rate of 1.108 million units last month… Homebuilding soared in the Northeast and densely populated South as disruptions caused by frigid temperatures eased. Housing starts also rose in the West, but plunged in the Midwest, likely dragged down by winter storms… There have been anecdotes of workers not reporting for duty at construction sites for fear of deportation as the Trump administration cracks down on illegal immigration. Undocumented immigrants account for 23% of construction labor, the Center for American Progress estimated in 2021.”
March 19 – CNBC (Diana Olick): “Applications for a mortgage to purchase a home were basically flat week to week, up just 0.1%. They were 6% higher than the same week one year ago. ‘Purchase application volume inched up to its highest level in six weeks, led by a 3% increase in FHA purchase applications,’ said Mike Fratantoni, senior vice president and chief economist at the MBA. ‘Growing inventories of homes on the market and steadier mortgage rates are supporting homebuying activity thus far this spring.’”
March 17 – Bloomberg (Mark Niquette): “Disappointing retail sales last month added to concerns of a pullback in consumer spending in the US, while a pair of business surveys suggested growing caution. Retail sales rose by less than forecast in February and the prior month was revised down to mark the biggest drop since July 2021… Seven of the retail report’s 13 categories posted decreases, notably motor vehicles — which were expected to rebound from a weak January. Gasoline sales, as well as those of electronics and apparel were also lower. Spending at restaurants and bars, the only service-sector category in the retail report, declined by the most in a year.”
March 17 – Reuters (Dan Burns): “Factory activity in New York State plummeted this month by the most in nearly two years…, with new orders falling sharply and input prices climbing at the fastest rate in more than two years in the latest sign the economy may be weakening. The Federal Reserve Bank of New York said its Empire State manufacturing index plunged by nearly 26 points – the largest drop since May 2023 – to a reading of negative 20.0 from positive 5.7 in February.”
March 17 – Bloomberg (Michael Sasso): “Confidence among US homebuilders slid this month to the lowest level since August, dragged down by worry over tariffs, higher construction costs and economic uncertainty heading into the spring selling season. An index of housing market conditions from the National Association of Home Builders and Wells Fargo fell 3 points to 39 in March… Measures of current sales of single-family homes and prospective-buyer traffic, dropped to their lowest levels since the end of 2023. Meantime, a gauge of expectations for the next six months held at 47.”
March 17 – Los Angeles Times (Sandra McDonald): “Several Southern California cities have the most credit card debt per household in the U.S., a new WalletHub study found. Santa Clarita ranked first out of 181 U.S. cities, with a household average of about $22,753 in credit card debt, and a total of about $1.7 billion in debt for its 228,000 residents, according to data taken from the U.S. Census Bureau and TransUnion, WalletHub said. Chula Vista was second, with an average of $20,567 in credit card debt per household, and a total of $1.8 billion among its 275,000 residents.”
March 17 – Bloomberg (Alex Tanzi): “A growing share of US consumers say they’re not seeking loans because they expect to be refused amid tight credit conditions, according to… the Federal Reserve Bank of New York. The share of discouraged borrowers, defined as respondents who said they needed credit but didn’t apply because they didn’t expect to get approved, climbed to 8.5% in the New York Fed’s latest Survey of Consumer Expectations. That’s the highest level since the study began in 2013. The perceived likelihood of being rejected increased across different forms of credit, from cards to secured loans to buy homes and cars. Roughly one-third of auto loan applicants expected to get turned down, the highest share since the start of the series…”
March 20 – Bloomberg (Maxwell Adler): “Los Angeles is facing a projected deficit of nearly $1 billion in the next fiscal year as the city grapples with the aftermath of historic wildfires and a deep decline in revenue. A key budget official painted a grim picture of the city’s finances at a council meeting… Warnings included the possibility of thousands of layoffs and ‘extremely difficult cost-cutting decisions’ that will be required to close the gap…”
China Watch:
March 17 – Financial Times (Thomas Hale, Joe Leahy and Wenjie Ding): “China has announced a plan to revitalise domestic consumption as President Xi Jinping’s government battles to reverse weak confidence and deflationary pressures in the world’s second-largest economy. The government will ‘vigorously boost consumption’ and ‘expand domestic demand in all directions’, according to Xinhua… echoing Xi’s exhortation late last year for policymakers to shift towards supporting demand following a sustained push to boost industry. The plan from the state council… will focus on raising incomes, stabilising the real estate and stock markets, and improving medical and pension services, though policymakers provided few details…”
March 16 – Bloomberg: “China will take steps to revive consumption by boosting people’s incomes…, as part of a plan that adds to recent pledges by the government to support demand in an economy threatened by Donald Trump’s tariffs… Policymakers in China increasingly recognize that a broad recovery in incomes is necessary to encourage people to boost spending. At parliamentary meetings this month, the country’s leadership made boosting consumption the top priority of the annual work report for the first time since President Xi Jinping came to power over a decade ago.”
March 16 – Bloomberg (Liangping Gao and Ryan Woo): “China’s property slump persisted in February, with official figures… showing declines in prices, investment and sales, as government measures and promises of more stimulus did little to boost demand in the crisis-stricken sector. New home prices dipped 0.1% versus a month earlier after two months of relatively steady prices… On a year-on-year basis, new home prices fell 4.8%… The data also showed a decrease in resale home prices across so-called tier-one, tier-two and tier-three cities, indicating a downturn both on a monthly and annual basis.”
March 17 – Bloomberg: “Chinese consumption, investment and industrial production exceeded estimates to start the year, pointing to signs of resilience for an economy still in need of more stimulus as Donald Trump’s tariffs threaten growth. Retail sales clocked their best reading in the first two months since October…, while industrial output exceeded the median estimate in a Bloomberg survey of analysts. Growth in fixed-asset investment marked the fastest since the gain in the first four months of 2024.”
March 17 – Bloomberg: “China’s $600 billion corporate dollar bond market is showing signs of resurgence, as optimism over artificial intelligence advances and recent government steps to ease the property crisis help boost confidence. Chinese firms have sold about $13 billion of dollar-denominated notes so far this year in publicly announced deals… That’s double the year-earlier total and the highest level since 2022. The pipeline is mostly driven by financial firms and local government financing vehicles…”
March 21 – New York Times (Keith Bradsher): “Buried in China’s latest government budget were some numbers that add up to an alarming trend. Tax revenue is dropping. The decline means that China’s national government has less money to address the country’s serious economic challenges, including a housing market crash and the near bankruptcy of hundreds of local governments. Weak tax revenue also puts China’s leaders in a box as they square off with President Trump… The drop in tax collections leaves China’s leaders in an unfamiliar position. Until the last several years, China enjoyed robust revenue, which it used to invest in infrastructure, a rapid military buildup and extensive industrial subsidies.”
Central Bank Watch:
March 19 – Axios (Courtenay Brown): “Around the world, economic policymakers are adapting to the reality that President Trump could upend their plans at a moment’s notice. Some global central bankers all but admit they are at the whim of Trump, with hesitancy to adjust their policy dials until they know the degree to which they will be a tariff target… The intrigue: Central banks are no longer able ‘to be either the frontmen or rhythm-keepers of macro policy,’ Thierry Wizman, a currency and rates strategist at Macquarie, wrote… ‘They’re now ‘followers,’ who are ceding their dynamism to events in federal legislatures, executive mansions, and diplomatic halls,’ Wizman added, noting that the Federal Reserve is among the central banks that will ‘defer to future events outside its scope of power.’”
March 20 – Reuters (William Schomberg and Suban Abdulla): “The Bank of England held interest rates at 4.5% and warned against assumptions that they would be cut over its next few meetings as it grappled with deep uncertainty hanging over the British and world economies. Noting the escalation of global trade tensions kicked off by the United States under President Donald Trump, the Monetary Policy Committee voted 8-1 to keep rates on hold…”
March 20 – Bloomberg (Ott Tammik): “European Central Bank Governing Council member Madis Muller warned that US President Donald Trump’s push to impose trade levies could stoke inflation. ‘The market is expecting still the rates to go a little bit lower, but i think we have to be also careful,’ he said. ‘When we think of in which direction for example the tariffs or counter-tariffs imposed by the EU on American goods might have an impact on the economy, it would weaken the economy both in Europe and the US, but also it would probably drive logically prices a bit higher, so there’s a bit of upside risk for inflation.’”
Europe Watch:
March 18 – Financial Times (Arne Delfs, Michael Nienaber and Kamil Kowalcze): “German lawmakers passed a landmark spending package, taking a major step toward unlocking hundreds of billions of euros in debt financing for defense and infrastructure and heralding the end of decades of budget austerity. The controversial legislation — pushed by conservative Chancellor-in-waiting Friedrich Merz — was approved… in the lower house of parliament with 512 votes out of a total of 733, comfortably clearing the two-thirds threshold required for changes to the country’s constitutional borrowing rules. The bill, also backed by the Social Democrats and the Greens, would largely release defense spending from the so-called debt brake, creating a potentially unlimited supply of money to rearm to deter Russia. It would also set up a €500 billion ($546bn) fund to invest in the country’s aging infrastructure.”
March 21 – Politico (Hans Von Der Burchard, Clea Caulcutt and Tim Ross): “European Union governments have expressed fears that the radical spending plans announced by Germany’s chancellor-in-waiting will end up skewing the bloc’s single market and could give the country an unfair competitive edge. A month on from an election that made Friedrich Merz almost certainly the next leader in Berlin, the upper house of parliament on Friday approved a historic change to the country’s basic law to exclude defense investment above 1% of economic output from the nation’s strict spending rules, along with a €500 billion fund for infrastructure and green energy, clearing the final parliamentary hurdle.”
EM Watch:
March 20 – Bloomberg (Beril Akman and Tugce Ozsoy): “Turkey’s central bank raised one of its key interest rates in a surprise meeting on Thursday, the latest move by authorities to reverse a decline in the lira. The monetary authority hiked the overnight lending rate by two percentage points to 46%, while keeping the main gauge of one-week repo unchanged.”
March 18 – Financial Times (Ayla Jean Yackley, Andrew England and Mari Novik): “Turkish police have detained Istanbul’s mayor Ekrem İmamoğlu, the main political challenger to President Recep Tayyip Erdoğan, in an intensifying crackdown against the opposition to the country’s longtime ruler. State media said İmamoğlu’s detention… was part of an investigation into alleged terrorism links, but the opposition described the move as a ‘coup attempt’ and the arrest sent Turkish markets tumbling. The opposition Republican People’s party (CHP) had been set to name İmamoğlu, one of the country’s most popular political figures, as its presidential candidate on Sunday ahead of elections due by 2028.”
Japan Watch:
March 19 – Bloomberg (Toru Fujioka and Sumio Ito): “The Bank of Japan kept its benchmark rate unchanged and cited worries over the potential impact from US tariff policies, suggesting that it’s not in a rush to hike for now. The central bank added a reference to trade policies to its list of risks to the outlook, its statement showed… ‘Wages and prices are on track,’ Ueda said during his press conference… ‘But it’s difficult to judge how much closer we are to achieving our goal when uncertainties over the US and overseas trade policies are high.’”
March 17 – Bloomberg (Hidenori Yamanaka): “Concerns about slumping support for Prime Minister Shigeru Ishiba’s administration added to pressure on Japanese government bonds on Monday, helping send the 40-year yield briefly to an all-time high of 3%. With speculation that policymakers may loosen fiscal discipline to increase spending before elections, the 40-year yield briefly rose to the highest since the bond’s issuance in 2007. Meanwhile, 30-year yields hit 2.63%, a level last seen in 2006.”
Leveraged Speculation Watch:
March 21 – Reuters (Nell Mackenzie): “Hedge funds added more bearish positions than bullish ones in March than at any time since 2020, doubling down on bets that U.S. stocks have further to fall, according to a Goldman Sachs note… Rather than retreating from the market altogether, as many investors did when stocks dropped sharply earlier this month, hedge funds have instead continued to add trades, with a clear preference for ones that bet on more declines, the Goldman Sachs note… said.”
Social, Political, Environmental, Cybersecurity Instability Watch:
March 18 – Financial Times (Attracta Mooney and Jana Tauschinski): “The concentration of carbon dioxide in the atmosphere is at its highest point in 800,000 years, according to UN research that found 2024 was likely to have been the hottest year on record and the first to surpass 1.5C above pre-industrial levels… The UN’s World Meteorological Organization said signs of human-induced climate change ‘reached new heights’ last year, with record greenhouse gas levels — combined with the El Niño weather phenomenon and other factors — causing record heat. ‘Our planet is issuing more distress signals,’ said UN secretary-general António Guterres… His comments came after President Donald Trump launched a sweeping attack on environmental policy, including pulling the US out of the Paris climate agreement for the second time.”
March 18 – Axios (Andrew Freedman): “A new scientific report depicts a rapidly warming Earth, with widespread consequences such as sea level rise, melting glaciers and extreme weather events. The World Meteorological Organization’s State of the Global Climate 2024 report is designed to inform policymakers of the status of the climate system. It depicts a planet with a high — and increasing — fever due to record high levels of human-caused greenhouse gases. The United Nations agency’s annual report… doesn’t contain many surprises for those closely following climate science… On carbon dioxide, the report finds that current levels of the main long-lived greenhouse gas is at a record high of 151% of preindustrial levels back in the year 1750. This is the highest level of CO2 in at least 800,000 years, and likely long before that… Current levels of methane, a powerful, short-term warming agent, are 265% of preindustrial levels…”
Geopolitical Watch:
March 15 – Financial Times (Stefania Palma and Andrew England): “The US on Saturday launched a wave of air strikes against Houthi rebels in Yemen, as Donald Trump warned that ‘hell will rain down upon’ the Iran-backed group if they continue to attack shipping in the Red Sea. The US president also warned Iran to halt its support for the militant group ‘immediately’… The Houthi-run health ministry said at least nine civilians were killed and nine wounded in the strikes on Sana’a, Yemen’s capital. The attacks and Trump’s comments prompted an angry response from Tehran, whose foreign minister Abbas Araghchi said on X that the US government ‘has no authority or business dictating Iranian foreign policy. That era ended in 1979’, he said…”
March 17 – Bloomberg (Nick Wadhams and Iain Marlow): “President Donald Trump ratcheted up pressure on Iran to rein in the Houthis, raising the possibility of retaliatory strikes against the Islamic Republic if the militant group in Yemen doesn’t stop its attacks. ‘Any further attack or retaliation by the ‘Houthis’ will be met with great force, and there is no guarantee that that force will stop there,’ Trump wrote on Truth Social. ‘Every shot fired by the Houthis will be looked upon, from this point forward, as being a shot fired from the weapons and leadership of IRAN, and IRAN will be held responsible.’”
March 18 – Financial Times (Neri Zilber, James Shotter, Heba Saleh, Steff Chávez and James Politi): “Israeli Prime Minister Benjamin Netanyahu said his country had returned to ‘fighting with force’ against Hamas after launching a series of strikes in Gaza that killed hundreds of Palestinians and shattered a two-month-old ceasefire in the enclave. Health authorities in the Hamas-controlled territory said at least 404 people were killed and 526 injured in the air strikes on Tuesday, among the highest daily tolls since the start of the conflict.”
