Economic News, or We're All Going to Die!!!! Or Not. I'm not a Psychic.

April 2, 2025 was Liberation Day, the day that Trump's tariff offensive against the world started. Absent any real numbers, the press focused on the stock market's reaction as proof that it was a bad and destructive thing. Well...

There goes that narrative. Stocks are now back to where they were on April 2 one month later.

Are stocks the economy? No. It's somewhere between investment, speculation, and gambling, and the more time goes on, the more I think it's closer to gambling than anything else. What else is there?

Well, how about this? The below is the 2-year bond yield on US Treasuries over the last three months.

This is important because the 2-year bonds are the main vehicle of financing US debt, and it's lost 50 basis points since Trump took office. The US has a current debt of nearly $37 trillion. 50 basis points saved on that matters when refinancing bonds and directly affecting the amount of interest payments. We're currently at a point where interest payments on debt are probably going to be more than $1 trillion a year. That's more than the DOD's entire budget of about $850 billion.

Shaving down interest rates has an outsized effect on our deficit, and it's why Trump has been so vocal against Fed Chair Powell, an officer who reports to Secretary of the Treasury, Bessent. (Tangentially, Trump does have the power to fire Powell. It's a minor theme of the employment lawsuits going around right now.) The Fed directs interest rates, and the Fed's rates are well out of alignment with market rates, indicating a necessary cut (you know, what Powell rushed to do in October of last year in order to try and help Kamala Harris win the presidency).

Okay, but what else? Who cares about interest rates? I don't really care, even though I know I should. How about this:

One of the lesser talked about parts of the Biden economy was the growth of jobs at the expense of people who were born here in favor of those who weren't. You can see that in the graph where the red line (foreign workers) was consistently above the growth of the green line (native workers), but this last month saw a sharp change, news brought about by the 177,000 April employment numbers.

There is no one number that can indicate the strength of the economy, but the GDP numbers for Q1 (when you actually look under the baseline -.3%) was actually pretty good, employment seems to be moving in the right direction, and bond yields seem to indicate better management of federal debt.

We are just over 100 days into Trump's presidency. He walked in with what he saw as a mandate to shake things up. We've gotten a lot of noise about how it's all bad, but...all I'm really seeing is signs of hope.

posted by TheJamesMadison at 04:15 PM

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