“The markets are reacting to the shock of seeing a jump in import prices. It raises concerns about inflationary pressures, and higher interest rates down the road.”
“Although durable goods orders bounced back last month, the turnaround is not strong or broad-based enough to prevent the Fed from easing at the Dec. 11 meeting if it feels that another rate cut is appropriate.”
“European governments have a card they could play in the current crisis: token assistance in the rebuilding of Iraq, which would largely stick the United States and the United Kingdom with the entire tab.”
“An upward surprise in the (producer price index and consumer price index) would be bad for stocks ... but if you get benign readings (this) week, that gives the Fed the ability to be able to pause if necessary.”
“I guess if there's any surprise it's that I would have thought exports would have grown a little more than they did. But in the second quarter everyone else had weaker economies, although more recent signs are that things abroad are picking up. So maybe June was too soon to look for an increase.”
“Imports are about twice as large as exports, so just to stabilize the deficit, exports have to grow twice as fast. That's a pretty tall order. Then you throw oil on top of it.”
“My expectation was the trade deficit would increase anyway into the low 60 (billion dollar a month) range. A $70 billion (monthly trade gap) sounds like a stretch, but we could be looking at the mid to high 60s now.”
“We should see a big increase in oil imports and, given the overall robust demand in the U.S., we are also going to see higher non-oil imports. Over the next few quarters, the deficit is going to get bigger.”
“The only thing that the Fed can do to correct the current- account imbalance is to slow the U.S. economy. If you are adding up reasons for why the Fed will keep on tightening, the current-account deficit is on that list.”
