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US Economy: Looking Good

According to Jamie Dimon, CEO of JPMorgan Chase, America’s economy is currently looking “pretty good.”  However, it is likely that there will soon be a “downturn,” with the economy “certainly dipping into a recession.”

In an article written by Troy Tanzy and Daniel Rangel, it was stated:

“Core inflation was back above 2% for March, according to the latest inflation report which came out Wednesday morning. The Consumer Price Index (CPI) was down slightly in March (down 0.1% month over month), but the core inflation rate rose 0.2% for the month. According to TD Economics, a 4.9% drop in gasoline prices held the CPI level relatively constant to slightly down.”

This marks a rise in inflation  which is “reflective of higher prices in housing, medicine and food.” It is also expected that Federal Reserve officials will increase rates another two more times (at least) this year with the observation of the continued escalation in inflation to its target rate.  However, with inflation continuing to accelerate, rates will be raised in accordance by the Fed, partly as a defensive tactic against a possible recession.

Market Watch: US and China

With any kind of political tension comes the potential for delay in progression of the achievement of economic goals. At least, that could be the case for decision-making (and deals) between America and China.  According to ABB CEO Ulrich Spiesshofer, with America and China’s recent threat to fresh import tariffs, a “quite unique” state of affairs has emerged.  This, at a time when finally – for the first time in 10 years – there is “stability and growth across various markets.”

However, if a trade war occurs – or even if there is anticipation of one – things may change.  As Spiesshofer said:

“So, I’m concerned, I would be concerned, if we get a lot of dampening effects and uncertainties. We need certainty, in terms of decision-making, we need certainty for investment climate, because altogether, I think the underlying demand is there on the consumer side.”

As such, the US has launched a complaint.  In a statement to the World Trade Organization it said:

“China appears to be breaking WTO rules by denying foreign patent holders, including US companies, basic patent rights to stop a Chinese entity from using the technology after a licensing contract ends. “China also appears to be breaking WTO rules by imposing mandatory adverse contract terms that discriminate against and are less favourable for imported foreign technology.”

Meanwhile the Ministry of Commerce in China has committed to being “fully prepared to defend [its] legitimate interests [remaining] confident and capable of meeting any challenge.”