Economic News

ASIA: The major Asian stock markets had a mixed day today: • NIKKEI 225 increased 124.62 points or 0.27% to 45,754.93 • Shanghai decreased 0.34 points or -0.01% to 3,853.302 • Hang Seng decreased 33.97 points or -0.13% to 26,484.68 • ASX 200 increased 8.50 points or 0.10% to 8,773.00 • SENSEX decreased 555.95 points or -0.68% to 81,159.68 • Nifty50 decreased 166.05 points or -0.66% to 24,890.85 The major Asian currency markets had a mixed day today: • AUDUSD decreased 0.00401 or -0.61% to 0.65460 • NZDUSD decreased 0.00416 or -0.72% to 0.57736 • USDJPY increased 1 or 0.67% to 149.772 • USDCNY increased 0.00854 or 0.12% to 7.14425 The above data was collected around 12:43 EST. Precious Metals: • Gold decreased 1.53 USD/t oz. or -0.04% to 3,734.68 • Silver increased 0.876 USD/t. oz. or 1.99% to 44.786 The above data was collected around 12:48 EST. EUROPE/EMEA: The major Europe stock markets had a negative day today: • CAC 40 decreased 32.03 points or -0.41% to 7,795.42 • FTSE 100 decreased 36.45 points or -0.39% to 9,213.98 • DAX 30 decreased 131.98 points or -0.56% to 23,534.83 The major Europe currency markets had a mixed day today: • EURUSD decreased 0.00889 or -0.76% to 1.16537 • GBPUSD decreased 0.01209 or -0.90% to 1.33296 • USDCHF increased 0.00629 or 0.79% to 0.80106 The above data was collected around 13:36 EST. US/AMERICAS: US Market Closings: Dow declined by 173.96 points (-0.38%) to 45,947.32 S&P 500 declined by 33.25 points (-0.50%) to 6,604.72 NASDAQ declined by 113.16 points (-0.50%) to 22,384.70 Russell 2000 declined by 23.94 points (-0.98%) to 2,411.04 Canada Market Closings: TSX Composite declined by 24.97 points (-0.08%) to 29,731.98 TSX 60 declined by 3.70 points (-0.21%) to 1,755.24 Brazil Market Closing: Bovespa declined by 1,144.52 points (-0.78%) to 145,347.23 ENERGY: The oil markets had a mixed day today: • Crude Oil decreased 0.12 USD/BBL or -0.19% to 64.870 • Brent decreased 0.092 USD/BBL or -0.13% to 69.218 • Natural gas increased 0.0192 USD/MMBtu or 0.67% to 2.8772 • Gasoline decreased 0.0121 USD/GAL or -0.60% to 1.9994 • Heating oil increased 0.0356 USD/GAL or 1.50% to 2.4128 The above data was collected around 13:39 EST. • Top commodity gainers: Silver (1.99%), Wool (8.11%), Palladium (4.41%) and Platinum (3.93%) • Top commodity losers: Copper (-1.15%), Cocoa (-1.78%), Nickel (-1.07%) and Feeder Cattle (-1.63%) The above data was collected around 13:52 EST. BONDS: Japan 1.6490% (+0.95bp), US 2’s 3.67% (+0.058%), US 10’s 4.1870% (+3.5bps); US 30’s 4.77 (+0.013%), Bunds 2.7714% (+2.4bp), France 3.600% (+3.25bp), Italy 3.634% (+4.08bp), Turkey 31.575% (+212.5bp), Greece 3.49% (+3bp), Portugal 3.190% (+3.1bp); Spain 3.336% (+2.9bp) and UK Gilts 4.7590% (+8.35bp) The above data was collected around 13:54 EST.

Leer en Español On 9 September, France’s prime minister, François Bayrou, quit after losing a confidence vote that toppled his government. Shortly after, President Emmanuel Macron appointed a new prime minister, Sebastien Lecornu: He will be the second prime minister in less than a year and the fifth in two years under Macron’s presidency. The country’s problems remain: France has the highest fiscal deficit in Europe and a highly fragmented parliament.    One objective, many views: There is broad political consensus on the need to reduce France’s fiscal deficit—the highest in the Euro area and almost double the European Commission target of 3.0%—but sharp disagreements remain over how to achieve it. Left-leaning parties advocate for higher taxes on the wealthy, while the center-right opposes such measures, as it would undermine President Macron’s pro-business agenda. That said, Lecornu should avoid reopening the pension reform debate if he wants to keep his seat—his predecessors were ousted over this issue. France is now the only developed economy where the over-65 population enjoys higher average incomes than the working-age population, making pension reforms an especially sensitive subject.    Pouring gasoline on the fire: While political debates continue in parliament and across social media, mass protests against budget cuts have once again filled the streets. At the same time, Fitch Ratings has downgraded France’s sovereign credit rating to its lowest level on record, further intensifying the pressure on the country’s fiscal outlook. In this context, Lecornu is expected to send a full budget draft to parliament by October 7.   What our panelists think about the future fiscal deficit: Over the past months, our panelists have revised their forecasts to project a slightly narrower fiscal deficit in 2025 and 2026. Nevertheless, the fiscal deficit in both years is projected to remain well above the European Commission’s 3.0% of GDP threshold, as the country’s extensive welfare-driven public spending will take time to recalibrate. For context, France has not recorded a fiscal surplus since 1974—the year Richard Nixon resigned over the Watergate scandal and Muhammad Ali defeated George Foreman.  Insight from our analysts:  Commenting on future political instability, ING analysts stated:  “If […] the Prime Minister manages to keep his position, it will probably be at the cost of less rigorous fiscal consolidation, effectively postponing the promised budgetary consolidation. However, it remains possible that Mr Lecornu will not succeed in forming a viable coalition. In this case, Macron could appoint a new Prime Minister, but the chances of success would not be any higher. This could ultimately lead to another dissolution of the National Assembly. In our view, the probability of Macron resigning is very low at this stage. Nevertheless, instability will remain at least until the 2027 presidential elections.”  Moreover, EIU analysts added:  “The forthcoming discussions between Mr Lecornu and other parties do not look promising. His political survival is contingent on obtaining parliament’s confidence and then maintaining it for long enough to get a budget passed that reduces the deficit. He will also need to find a way to soothe public tensions and de-escalate the protests. With opposition parties seemingly unwilling to co-operate with a new government, these tasks may prove to be impossible. There is a high risk (45% probability) that Mr Lecornu’s government collapses prematurely, before the next presidential election in April 2027.”  Our latest analysis  The U.S. recorded stronger-than-expected retail sales in August.  In August, China’s economic activity was below market expectations.  The post Debt and disorder: The French political sequel nobody wanted appeared first on FocusEconomics.

QUESTION: You haven’t commented on Jimmy Kimmel, and now Disney is putting him back on the air. Anything? Bob ANSWER: I would never even shake hands with Kimmel. He is part of the bitter hatred that is dividing this country. As for Disney, if my kids were young, I would not ever take them to Disneyland with their pro-transgender approval, teaching little kids about this when less than 1% are transgender, and the suicide rate among those is very high. Disney was one about family values – no more. The Disney board has used the company for the personal interests of the top executives, which is for their own personal political gain. That is disgusting. If there were money involved, it would be 20 years in prison for using corporate assets for personal gain – that’s CRIMINAL! Just because it is using a public corporation to further the personal political goals and objectives of the board or directors, it is no different from cutting deals to enrich their family members. It is unethical, and that applies to both the left and the right. Disney is not their personal fiefdom. A board member of any public corporation who is using the company that they do not own to further their personal political agendas should be criminally prosecuted, and the practice should be outlawed with life imprisonment. What you do personally is one thing. What you do with the assets of a public corporation for personal gain whatsoever should be criminal activity.

Leer en Español What’s The Current Economic Situation In Mexico? Mexico’s economy grew by a revised 0.6% in Q2 from the previous quarter, slightly below the earlier estimate of 0.7%. The figure came in stronger than markets had expected and highlighted the economy’s ability to hold up despite U.S. tariffs. Growth was broad-based, with construction, finance, manufacturing and retail all contributing. Retail, in particular, likely got a boost from healthy tourism, rising real wages and low unemployment. That said, the pace of GDP growth looks set to cool in Q3: Lean government spending, weak remittances, U.S. tariffs on certain exports and uncertainty around U.S. trade policy are expected to weigh on activity. On the brighter side, the Central Bank’s continued monetary easing should give domestic demand some breathing room. How Is Mexico’s Inflation Trending? Inflation in Mexico has averaged close to the top of the Central Bank’s 2.0–4.0% target range so far this year, due largely to cost pressures in food and housing. Price rises for clothing and transport have been comparatively mild—the latter due to the recent fall in global energy prices. Our Consensus is for Mexico’s inflation to remain close to the top of the target range in the coming quarters, propped up by lower interest rates, solid wage growth and peso weakening. How Will The Peso Perform Ahead? The peso has strengthened so far this year against the dollar, thanks to solid export growth plus investor concerns over U.S. economic policy and institutional independence weighing on the greenback. However, our panelists expect the peso to progressively lose ground in the coming quarters as Banxico cuts interest rates by more than the Fed.  The currency is likely to remain volatile, though, with sources of uncertainty including U.S. migration policy, the outcome of the USMCA renegotiation in 2026 and further domestic reforms that are perceived by the market to weaken democratic safeguards. Failure to renew the trade deal with the U.S. and Canada—or a new agreement that has much less favorable terms for Mexico—could dampen the peso, as could domestic democratic backsliding or rising U.S. deportations hitting remittances inflows to Mexico. How Are U.S. Tariffs Impacting Mexico? Current U.S. tariffs on Mexico include those on goods not compliant with the USMCA trade deal plus sector-specific tariffs on aluminium, cars, copper and steel. Despite this, non-oil exports from Mexico to the U.S. have risen about 6% in annual terms so far this year. This partly reflects Mexican firms’ success in making many goods USMCA-compliant so as to avoid tariffs, plus some frontloading by firms. For more information check our dedicated article on U.S. tariffs against Mexico.  Perhaps the biggest impact of the tariffs to date is one that is less visible: A loss of new business investment. For instance, major electric car producers BYD and Tesla have both recently cancelled plans to build factories in Mexico due to trade uncertainty. On trade negotiations with the U.S., Itaú Unibanco analysts said: “We believe that Mexican authorities will continue to engage constructively with their US counterparts [on trade]. Negotiations are ongoing and are expected to continue until at least the end of next year, with a USMCA renegotiation likely to occur afterward. As the US is currently managing several trade deals, a USMCA renegotiation is likely to take place only at the end of 2026 or the beginning of 2027. Stricter local content laws should be the focus of all negotiations.” How Is U.S. Immigration Policy Affecting Remittances? The Trump administration is currently ramping up deportations, while the number of people crossing the Mexican border illegally has fallen to close to zero. The upshot is that remittances to Mexico from the U.S. fell year on year for the fourth month in a row in July. Going forward, remittances are likely to continue to be weighed on by deportations, reduced border crossings and a softer labor market. A remittances tax due to take effect in the coming months will be a further drag if implemented. What Is Our Panelists’ View on Fiscal Policy? After an election-related spending surge in 2024, the government has run a tight fiscal ship so far this year. In the first seven months of 2025, current spending was roughly flat year on year while capital spending plummeted by over a third following the completion of the former president’s key infrastructure projects. Our panelists expect Mexico’s fiscal deficit to narrow this year vs 2024 but to remain sizable at 3.8% of GDP—much larger than the past decade’s average. The fiscal deficit is forecast to remain above 3.0% of GDP in the coming years due to elevated social spending commitments, which coupled with weak GDP growth potential, will see public debt rise as a share of the economy in future years. On the fiscal outlook, EIU analysts said: “In its 2025 budget plan, the government projected a decline in spending as well as a modest improvement in revenue. We expect the overall effect to be a narrowing of the fiscal deficit from 4.9% of GDP in 2024 to 3% by 2029. However, this process will be gradual, and we expect some slippage past the consolidation targets that the administration has outlined for the immediate term. Ms Sheinbaum has a raft of spending priorities, including popular social programmes, and she has not proposed tax increases. The budget maintains a heavy emphasis on social spending, which Ms Sheinbaum will refrain from rationalising, despite the high cost. Plan México, the ambitious economic development strategy, will add further pressure, as will the need for unbudgeted spending towards policy concessions to the US, including in border security and migration management.” Goldman Sachs’ Alberto Ramos said: “Overall, fiscal consolidation is expected to continue, albeit at a gradual and unambitious pace and backloaded to 2027/28. We anticipate growing pressures on the spending side of the budget, particularly on rising pension payments, and a growing need for a tax reform/package, likely after the 2027 mid-term elections.” How is Central Bank Policy Set To Evolve? After four consecutive 50 basis point reductions,

Leer en Español What’s The Current Economic Situation In Mexico? Mexico’s economy grew by a revised 0.6% in Q2 from the previous quarter, slightly below the earlier estimate of 0.7%. The figure came in stronger than markets had expected and highlighted the economy’s ability to hold up despite U.S. tariffs. Growth was broad-based, with construction, finance, manufacturing and retail all contributing. Retail, in particular, likely got a boost from healthy tourism, rising real wages and low unemployment. That said, the pace of GDP growth looks set to cool in Q3: Lean government spending, weak remittances, U.S. tariffs on certain exports and uncertainty around U.S. trade policy are expected to weigh on activity. On the brighter side, the Central Bank’s continued monetary easing should give domestic demand some breathing room. How Is Mexico’s Inflation Trending? Inflation in Mexico has averaged close to the top of the Central Bank’s 2.0–4.0% target range so far this year, due largely to cost pressures in food and housing. Price rises for clothing and transport have been comparatively mild—the latter due to the recent fall in global energy prices. Our Consensus is for Mexico’s inflation to remain close to the top of the target range in the coming quarters, propped up by lower interest rates, solid wage growth and peso weakening. How Will The Peso Perform Ahead? The peso has strengthened so far this year against the dollar, thanks to solid export growth plus investor concerns over U.S. economic policy and institutional independence weighing on the greenback. However, our panelists expect the peso to progressively lose ground in the coming quarters as Banxico cuts interest rates by more than the Fed.  The currency is likely to remain volatile, though, with sources of uncertainty including U.S. migration policy, the outcome of the USMCA renegotiation in 2026 and further domestic reforms that are perceived by the market to weaken democratic safeguards. Failure to renew the trade deal with the U.S. and Canada—or a new agreement that has much less favorable terms for Mexico—could dampen the peso, as could domestic democratic backsliding or rising U.S. deportations hitting remittances inflows to Mexico. How Are U.S. Tariffs Impacting Mexico? Current U.S. tariffs on Mexico include those on goods not compliant with the USMCA trade deal plus sector-specific tariffs on aluminium, cars, copper and steel. Despite this, non-oil exports from Mexico to the U.S. have risen about 6% in annual terms so far this year. This partly reflects Mexican firms’ success in making many goods USMCA-compliant so as to avoid tariffs, plus some frontloading by firms. For more information check our dedicated article on U.S. tariffs against Mexico.  Perhaps the biggest impact of the tariffs to date is one that is less visible: A loss of new business investment. For instance, major electric car producers BYD and Tesla have both recently cancelled plans to build factories in Mexico due to trade uncertainty. On trade negotiations with the U.S., Itaú Unibanco analysts said: “We believe that Mexican authorities will continue to engage constructively with their US counterparts [on trade]. Negotiations are ongoing and are expected to continue until at least the end of next year, with a USMCA renegotiation likely to occur afterward. As the US is currently managing several trade deals, a USMCA renegotiation is likely to take place only at the end of 2026 or the beginning of 2027. Stricter local content laws should be the focus of all negotiations.” How Is U.S. Immigration Policy Affecting Remittances? The Trump administration is currently ramping up deportations, while the number of people crossing the Mexican border illegally has fallen to close to zero. The upshot is that remittances to Mexico from the U.S. fell year on year for the fourth month in a row in July. Going forward, remittances are likely to continue to be weighed on by deportations, reduced border crossings and a softer labor market. A remittances tax due to take effect in the coming months will be a further drag if implemented. What Is Our Panelists’ View on Fiscal Policy? After an election-related spending surge in 2024, the government has run a tight fiscal ship so far this year. In the first seven months of 2025, current spending was roughly flat year on year while capital spending plummeted by over a third following the completion of the former president’s key infrastructure projects. Our panelists expect Mexico’s fiscal deficit to narrow this year vs 2024 but to remain sizable at 3.8% of GDP—much larger than the past decade’s average. The fiscal deficit is forecast to remain above 3.0% of GDP in the coming years due to elevated social spending commitments, which coupled with weak GDP growth potential, will see public debt rise as a share of the economy in future years. On the fiscal outlook, EIU analysts said: “In its 2025 budget plan, the government projected a decline in spending as well as a modest improvement in revenue. We expect the overall effect to be a narrowing of the fiscal deficit from 4.9% of GDP in 2024 to 3% by 2029. However, this process will be gradual, and we expect some slippage past the consolidation targets that the administration has outlined for the immediate term. Ms Sheinbaum has a raft of spending priorities, including popular social programmes, and she has not proposed tax increases. The budget maintains a heavy emphasis on social spending, which Ms Sheinbaum will refrain from rationalising, despite the high cost. Plan México, the ambitious economic development strategy, will add further pressure, as will the need for unbudgeted spending towards policy concessions to the US, including in border security and migration management.” Goldman Sachs’ Alberto Ramos said: “Overall, fiscal consolidation is expected to continue, albeit at a gradual and unambitious pace and backloaded to 2027/28. We anticipate growing pressures on the spending side of the budget, particularly on rising pension payments, and a growing need for a tax reform/package, likely after the 2027 mid-term elections.” How is Central Bank Policy Set To Evolve? After four consecutive 50 basis point reductions,

The World According to Martin Armstrong We’re closing in on 3,000 copies sold — and for good reason. This book has already become an Amazon Bestseller, and it’s the only place you’ll find all of Martin’s major forecasts collected in one volume. Over the past 14 years, more than 15 of these forecasts have come true — and many are still unfolding right now. From sovereign debt crises, political upheavals, energy shocks, and the turning points in gold, silver, and equities — it’s all here, straight from the man who built Socrates. As one reader put it: “This book is the Rosetta Stone of Martin’s work. To see all the forecasts laid out in one place shows you just how accurate — and how consistent — he’s been.” Whether you’re a longtime follower or just discovering Armstrong Economics, this is the essential reference to understand the cycles driving our world. Click here to purchase your copy now! 

Leer en Español What’s The Current Economic Situation In Mexico? Mexico’s economy grew by a revised 0.6% in Q2 from the previous quarter, slightly below the earlier estimate of 0.7%. The figure came in stronger than markets had expected and highlighted the economy’s ability to hold up despite U.S. tariffs. Growth was broad-based, with construction, finance, manufacturing and retail all contributing. Retail, in particular, likely got a boost from healthy tourism, rising real wages and low unemployment. That said, the pace of GDP growth looks set to cool in Q3: Lean government spending, weak remittances, U.S. tariffs on certain exports and uncertainty around U.S. trade policy are expected to weigh on activity. On the brighter side, the Central Bank’s continued monetary easing should give domestic demand some breathing room. How Is Mexico’s Inflation Trending? Inflation in Mexico has averaged close to the top of the Central Bank’s 2.0–4.0% target range so far this year, due largely to cost pressures in food and housing. Price rises for clothing and transport have been comparatively mild—the latter due to the recent fall in global energy prices. Our Consensus is for Mexico’s inflation to remain close to the top of the target range in the coming quarters, propped up by lower interest rates, solid wage growth and peso weakening. How Will The Peso Perform Ahead? The peso has strengthened so far this year against the dollar, thanks to solid export growth plus investor concerns over U.S. economic policy and institutional independence weighing on the greenback. However, our panelists expect the peso to progressively lose ground in the coming quarters as Banxico cuts interest rates by more than the Fed.  The currency is likely to remain volatile, though, with sources of uncertainty including U.S. migration policy, the outcome of the USMCA renegotiation in 2026 and further domestic reforms that are perceived by the market to weaken democratic safeguards. Failure to renew the trade deal with the U.S. and Canada—or a new agreement that has much less favorable terms for Mexico—could dampen the peso, as could domestic democratic backsliding or rising U.S. deportations hitting remittances inflows to Mexico. How Are U.S. Tariffs Impacting Mexico? Current U.S. tariffs on Mexico include those on goods not compliant with the USMCA trade deal plus sector-specific tariffs on aluminium, cars, copper and steel. Despite this, non-oil exports from Mexico to the U.S. have risen about 6% in annual terms so far this year. This partly reflects Mexican firms’ success in making many goods USMCA-compliant so as to avoid tariffs, plus some frontloading by firms. For more information check our dedicated article on U.S. tariffs against Mexico.  Perhaps the biggest impact of the tariffs to date is one that is less visible: A loss of new business investment. For instance, major electric car producers BYD and Tesla have both recently cancelled plans to build factories in Mexico due to trade uncertainty. On trade negotiations with the U.S., Itaú Unibanco analysts said: “We believe that Mexican authorities will continue to engage constructively with their US counterparts [on trade]. Negotiations are ongoing and are expected to continue until at least the end of next year, with a USMCA renegotiation likely to occur afterward. As the US is currently managing several trade deals, a USMCA renegotiation is likely to take place only at the end of 2026 or the beginning of 2027. Stricter local content laws should be the focus of all negotiations.” How Is U.S. Immigration Policy Affecting Remittances? The Trump administration is currently ramping up deportations, while the number of people crossing the Mexican border illegally has fallen to close to zero. The upshot is that remittances to Mexico from the U.S. fell year on year for the fourth month in a row in July. Going forward, remittances are likely to continue to be weighed on by deportations, reduced border crossings and a softer labor market. A remittances tax due to take effect in the coming months will be a further drag if implemented. What Is Our Panelists’ View on Fiscal Policy? After an election-related spending surge in 2024, the government has run a tight fiscal ship so far this year. In the first seven months of 2025, current spending was roughly flat year on year while capital spending plummeted by over a third following the completion of the former president’s key infrastructure projects. Our panelists expect Mexico’s fiscal deficit to narrow this year vs 2024 but to remain sizable at 3.8% of GDP—much larger than the past decade’s average. The fiscal deficit is forecast to remain above 3.0% of GDP in the coming years due to elevated social spending commitments, which coupled with weak GDP growth potential, will see public debt rise as a share of the economy in future years. On the fiscal outlook, EIU analysts said: “In its 2025 budget plan, the government projected a decline in spending as well as a modest improvement in revenue. We expect the overall effect to be a narrowing of the fiscal deficit from 4.9% of GDP in 2024 to 3% by 2029. However, this process will be gradual, and we expect some slippage past the consolidation targets that the administration has outlined for the immediate term. Ms Sheinbaum has a raft of spending priorities, including popular social programmes, and she has not proposed tax increases. The budget maintains a heavy emphasis on social spending, which Ms Sheinbaum will refrain from rationalising, despite the high cost. Plan México, the ambitious economic development strategy, will add further pressure, as will the need for unbudgeted spending towards policy concessions to the US, including in border security and migration management.” Goldman Sachs’ Alberto Ramos said: “Overall, fiscal consolidation is expected to continue, albeit at a gradual and unambitious pace and backloaded to 2027/28. We anticipate growing pressures on the spending side of the budget, particularly on rising pension payments, and a growing need for a tax reform/package, likely after the 2027 mid-term elections.” How is Central Bank Policy Set To Evolve? After four consecutive 50 basis point reductions,

Leer en Español What’s The Current Economic Situation In Mexico? Mexico’s economy grew by a revised 0.6% in Q2 from the previous quarter, slightly below the earlier estimate of 0.7%. The figure came in stronger than markets had expected and highlighted the economy’s ability to hold up despite U.S. tariffs. Growth was broad-based, with construction, finance, manufacturing and retail all contributing. Retail, in particular, likely got a boost from healthy tourism, rising real wages and low unemployment. That said, the pace of GDP growth looks set to cool in Q3: Lean government spending, weak remittances, U.S. tariffs on certain exports and uncertainty around U.S. trade policy are expected to weigh on activity. On the brighter side, the Central Bank’s continued monetary easing should give domestic demand some breathing room. How Is Mexico’s Inflation Trending? Inflation in Mexico has averaged close to the top of the Central Bank’s 2.0–4.0% target range so far this year, due largely to cost pressures in food and housing. Price rises for clothing and transport have been comparatively mild—the latter due to the recent fall in global energy prices. Our Consensus is for Mexico’s inflation to remain close to the top of the target range in the coming quarters, propped up by lower interest rates, solid wage growth and peso weakening. How Will The Peso Perform Ahead? The peso has strengthened so far this year against the dollar, thanks to solid export growth plus investor concerns over U.S. economic policy and institutional independence weighing on the greenback. However, our panelists expect the peso to progressively lose ground in the coming quarters as Banxico cuts interest rates by more than the Fed.  The currency is likely to remain volatile, though, with sources of uncertainty including U.S. migration policy, the outcome of the USMCA renegotiation in 2026 and further domestic reforms that are perceived by the market to weaken democratic safeguards. Failure to renew the trade deal with the U.S. and Canada—or a new agreement that has much less favorable terms for Mexico—could dampen the peso, as could domestic democratic backsliding or rising U.S. deportations hitting remittances inflows to Mexico. How Are U.S. Tariffs Impacting Mexico? Current U.S. tariffs on Mexico include those on goods not compliant with the USMCA trade deal plus sector-specific tariffs on aluminium, cars, copper and steel. Despite this, non-oil exports from Mexico to the U.S. have risen about 6% in annual terms so far this year. This partly reflects Mexican firms’ success in making many goods USMCA-compliant so as to avoid tariffs, plus some frontloading by firms. For more information check our dedicated article on U.S. tariffs against Mexico.  Perhaps the biggest impact of the tariffs to date is one that is less visible: A loss of new business investment. For instance, major electric car producers BYD and Tesla have both recently cancelled plans to build factories in Mexico due to trade uncertainty. On trade negotiations with the U.S., Itaú Unibanco analysts said: “We believe that Mexican authorities will continue to engage constructively with their US counterparts [on trade]. Negotiations are ongoing and are expected to continue until at least the end of next year, with a USMCA renegotiation likely to occur afterward. As the US is currently managing several trade deals, a USMCA renegotiation is likely to take place only at the end of 2026 or the beginning of 2027. Stricter local content laws should be the focus of all negotiations.” How Is U.S. Immigration Policy Affecting Remittances? The Trump administration is currently ramping up deportations, while the number of people crossing the Mexican border illegally has fallen to close to zero. The upshot is that remittances to Mexico from the U.S. fell year on year for the fourth month in a row in July. Going forward, remittances are likely to continue to be weighed on by deportations, reduced border crossings and a softer labor market. A remittances tax due to take effect in the coming months will be a further drag if implemented. What Is Our Panelists’ View on Fiscal Policy? After an election-related spending surge in 2024, the government has run a tight fiscal ship so far this year. In the first seven months of 2025, current spending was roughly flat year on year while capital spending plummeted by over a third following the completion of the former president’s key infrastructure projects. Our panelists expect Mexico’s fiscal deficit to narrow this year vs 2024 but to remain sizable at 3.8% of GDP—much larger than the past decade’s average. The fiscal deficit is forecast to remain above 3.0% of GDP in the coming years due to elevated social spending commitments, which coupled with weak GDP growth potential, will see public debt rise as a share of the economy in future years. On the fiscal outlook, EIU analysts said: “In its 2025 budget plan, the government projected a decline in spending as well as a modest improvement in revenue. We expect the overall effect to be a narrowing of the fiscal deficit from 4.9% of GDP in 2024 to 3% by 2029. However, this process will be gradual, and we expect some slippage past the consolidation targets that the administration has outlined for the immediate term. Ms Sheinbaum has a raft of spending priorities, including popular social programmes, and she has not proposed tax increases. The budget maintains a heavy emphasis on social spending, which Ms Sheinbaum will refrain from rationalising, despite the high cost. Plan México, the ambitious economic development strategy, will add further pressure, as will the need for unbudgeted spending towards policy concessions to the US, including in border security and migration management.” Goldman Sachs’ Alberto Ramos said: “Overall, fiscal consolidation is expected to continue, albeit at a gradual and unambitious pace and backloaded to 2027/28. We anticipate growing pressures on the spending side of the budget, particularly on rising pension payments, and a growing need for a tax reform/package, likely after the 2027 mid-term elections.” How is Central Bank Policy Set To Evolve? After four consecutive 50 basis point reductions,

Including Philadelphia Fed early benchmark, released today. Several series are below recent peaks, including the early benchmark. Figure 1: CES Nonfarm payroll (NFP) employment (blue), implied preliminary benchmark (tan), early benchmark (green), implied GS final benchmark (red), CPS series adjusted to NFP concept, 3 month centered moving average (pink), and covered QCEW total employment, seasonally adjusted by author using X-13 (light blue), all in 000’s, s.a. Implied preliminary benchmarks calculated by wedging in the revision between 2024M03 to 2025M03. Source: BLS, Philadelphia Fed, Goldman Sachs, and author’s calculations.

John Whitlow Trump’s brand of authoritarianism emerges out of New York City’s real estate industry. As mayor, Zohran Mamdani vows to curb that sector’s outsized power. A fight is coming. The post The Real Estate Roots of Trumpism and the Coming Clash With Democratic Socialism appeared first on The Nation.