Mind the Trade Gap
America is doing its best to help out the rest of the world. The latest U.S. trade deficit numbers show imports exceeding exports by the greatest dollar amount on record. It’s nice of them to buy so much stuff from everyone else at a difficult juncture:
An escalating trade deficit is generally a symptom of economic overheating, but there is little risk of active attempts to use either fiscal or monetary policy to douse the fire. The Biden administration continues to attempt to push through fresh stimulus to fund infrastructure. Meanwhile, minutes from the latest meeting of the Federal Reserve’s monetary policy committee dropped strong hints that the central bank really is serious about letting conditions run hot. It described the economy as “far” from the goal of full employment (which is debatable and shows intent to bring unemployment down much more), while my colleague Vivien Lou Chen drew attention to this sentence: