Wow! The U.S. second quarter GDP jumped to 3%, and the people in the White House immediately started celebrating, as if they were about to set off firecrackers! The King of Understanding, Trump, exclaimed in a huff: 'Look! 3%! Incredible! Those old coots at the Federal Reserve need to cut rates for me! NOW!' The way he acted, you'd think the U.S. economy was truly taking off into space.
Wait! Don’t rush to a climax. Peel back this shiny data surface, and what’s stuffed inside is all the rotten cotton from the import plunge!
The clear-headed people in the economic circle, like the veteran Tom Porcelli from PGIM, directly fired back: 'Just focusing on the total GDP and being happy? Are you out of your mind? This thing is just a trick!' He exposed that this 3% 'muscle man' image is 70% attributed to the 'diarrhea-like plunge' in imports!
In the first quarter, businesses were scared silly by the King of Understanding's 'tariff wolf is coming' and frantically stockpiled goods, causing imports to skyrocket like a firecracker, directly smashing GDP into a pit (contracting by 0.5%). By the second quarter? Wow! These guys couldn't stockpile anymore, and imports 'crashed' by 23%, like a kite with a broken string! Exports? They just fell by a mere 2.5%. With this in and out, net exports soared like they were on steroids, adding a full 5 percentage points of 'Viagra' to GDP! This is called a strong economy? This is data on drugs! Purely a trade panic aftereffect, artificially creating a 'false prosperity'!
Once the effects of this 'trade Viagra' wear off, the U.S. economy’s 'kidney deficiency' will immediately reveal its true form:
The common people are tightening their belts to the point of sparking! The bulk of GDP (two-thirds!) - consumption expenditure, grew at a speed that has plummeted to 1.4%, setting the most miserable record since the pandemic! Supermarket prices are soaring, wages aren’t moving an inch, and after buying groceries and filling up the tank, the few coins in the common people's pockets are gone, and what’s left for consumption?
The bosses are scared stiff! Business investment? Forget it! With an unclear path ahead and tariffs hanging over their heads, who would dare to throw their hard-earned money into expansion? Investment growth is as wilted as a frostbitten eggplant - it's shriveled up! Everyone's on the sidelines, waiting to die, or thinking about how to move their factories out of this powder keg.
The inner core is completely hollow! Kick away these nuisances of 'import diarrhea' and 'inventory fluctuations' and take a look at the real domestic demand - private final sales in the country only grew a pitiful 1.2%! This set the worst record since the end of 2022! This is the true nature of the American economy -虚！弱！不！举！
The King of Understanding is still bragging there, signing a few 'agreements' with the EU and Japan, boasting that 60% of imports won't be cut. Bah! Who are you fooling? Economists take a look behind the curtains: the actual tariff level in the U.S. is terrifyingly high, comparable to before the Great Depression in the 1930s! Those so-called 'victory agreements' sound nice, but in essence, they just loosen the noose a bit, while the noose is still tightly around the necks of businesses and common people! Cost transfer and soaring prices - who ends up footing the bill? Isn’t it still us ordinary folks!
The big shots at the Federal Reserve are now in a bind. The King of Understanding is spitting on Twitter, calling for interest rate cuts, while Wall Street traders are eagerly waiting for the floodgates to open. But looking back at the Beige Book (the Federal Reserve's regional economic survey reports): from May to July, only five places in the U.S. had a bit of 'glimmer of hope', and the job market is barely breathing. Those with jobs might feel 'okay', but what about those looking for work? Their resumes are sinking like stones, and interviews are making them question their lives - they’re completely ignored by this 'beautiful' GDP data! Society is torn - on one side, the elites are having champagne parties, and on the other, the grassroots are struggling to survive.
How long can this show of 'GDP muscle' last? Economists with a bit of sense know: the second half of the year is precarious! The 'data bonus' from the plummeting imports will be gone soon. Companies that have been long ravaged by high tariffs are already scared to death. Rebuilding confidence? That’s a long time coming! The common people have been gnawed to the bone by inflation, and this engine of consumption is about to completely stall. The 3% that the King of Understanding is proud of is just a broken castle built on quicksand; one big wave comes and it’s all in pieces!
Now some are shouting, 'Has the worst of the trade war passed?' Haha, hold your horses. Even if all tariffs were lifted tomorrow (dream on!), who will save those things that have been ruined - the common people's deflated wallets, the bosses' lost courage, and the purchasing power gnawed away by inflation? Relying on the rate cuts that might be spat out by the King of Understanding? A drop in the bucket!
So the soul-searching question comes:
When this wave of 'import diarrhea' creates the GDP illusion dissipates and the Emperor's new clothes are completely stripped away, what will the real U.S. economy reveal? Is it a tough guy who can hold up, or is it just a mess with a heap of rotten accounts? When will this false bubble of prosperity go 'pop' and collapse into shambles? We shall see!#美联储利率决议 $BTC