Rabobank’s Michael Every highlights Trump’s suggestion that US growth could reach 15% under Fed Chair Warsh, implying a willingness to run the economy hot and supporting capital inflows into the Dollar. The report notes AI-driven investment, potential productivity gains, and evolving US chip and industrial policy, while upcoming US retail sales and NFIB survey data provide the near-term macro focus.

Trumponomics, AI and capital inflows

"Trump stated if Fed Chair Warsh does his job, US growth could be 15% or higher. It’s unclear if that’s annual, exceeding China’s early spurt, or over the remaining two-and-a-half years of his presidency, so higher than China today, or nominal or real. Yet the key signal for those who called Warsh a ‘hawk’ is that the Fed is going to run the economy hot."

"That’s as the FT notes, ‘Bash All Day, Buy All Night’, explaining “Why foreigners keep pouring money into America” despite attacking it verbally all the time."

"Relatedly, the US is reportedly to exempt Big Tech from upcoming chip tariffs, with exemptions based on FDI commitments from Taiwan’s TSMC. That shows an expected pragmatic refinement of US neo-mercantilism in line with past phases of such political economy."

"In the US, AI is now being embraced by many firms in ways which may genuinely boost productivity beyond what old mindsets and models can compute. Yet not all AI is equal."

"US retail sales and the NFIB small business survey are the main points of interest for the day, against a backdrop of a panoply of far larger questions."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)