Are tariffs working? Are interest rates working?

"I feel badly for Canada (sort of). Mark Carney is getting torn apart by our trade war. For Canada, reciprocal tariffs would have been a very easy fix. But for reasons unknown, they wanted to keep their unfair trade system intact. And while the trade issue is biting Carney on one leg, his other leg is trying to keep half his country from leaving."

If somebody would ask me, as a consumer, how things are going right now, I would say okay. Not great, not poorly, but just okay. Am I disappointed in Trump because things are not sunshine and lollypops all over the horizon? Not a bit - I think he has done Herculean work all things considered. What do I mean? Not to throw stones, but Biden pretty much took us over the cliff. Coming back from that trip into the abyss has not been easy. And Jerome Powell at the Fed? Don't get me started.

Much has been said about Trump's fascination with tariffs. Will they work, or will they tank the economy? So far, so good. Most who have been paying attention know we have come up short on most of our current trade agreements. How can we tell? By the trade deficits we have been running. Trump wanted to reset many of our trade deals so we would not get hosed as badly. Tariffs are a way to get to that reset. Plus - as a bonus, we have already collected over $100B in tariffs. Enough so we actually ran a $27B surplus last month. That ain't nothing!

We keep hearing that some of our trade deals are "close". Good on that! But in the meantime, tariffs will be the Band-Aid to stop the bleeding. But there might be more to these tariffs than meets the eye. Trump does not seem the least bit nervous that some of our bigger trade deals are not closed as yet. Why? Tariff money keeps flowing in. But are these tariffs not inflationary? So far, so good. Inflation has ticked up just a smidge but is still under the prescribed 3%. Truthfully, the inflation under Biden made many of us smarter shoppers. Know the pricing on items which we need, and how and where to shop for them. 

Is there a dark cloud on the horizon? Sure is. That is why Trump has about had it with Jerome Powell. President Trump, like many of us, wonders what team Powell is playing for. The housing industry has issued a "yellow flare" alert. If interest rates don't come down soon, and substantially, we could be headed for a housing slump. For no good reason, whatsoever. If housing starts to slump, it will pull down many other industries with it. Are there warning signs already? Sure is. Housing is in such short supply the average house price is $400,000. Try paying for one of those with a 7% mortgage!

I feel badly for Canada (sort of). Mark Carney is getting torn apart by our trade war. For Canada, reciprocal tariffs would have been a very easy fix. But for reasons unknown, they wanted to keep their unfair trade system intact. And while the trade issue is biting Carney on one leg, his other leg is trying to keep half his country from leaving. Why? Canada's authoritarianism and socialism has run its course with the western provinces. Sad but true.

I know, I know - I did not mention the effects of the BBB (Big Beautiful Bill). It will take a while for this thing to catch hold. By the end of the year, we should all be able to see how this bill affects us individually as well as the country. Until then, let's all just hang on and enjoy the ride.