CNN (Cable News Network) in the United States reported yesterday (8th) that President-elect TRUMP is considering using the International Emergency Economic Powers Act (IEEPA) to declare a national economic emergency, in order to implement the tariff plan he had promised to the American people.
No final decision has been made yet
CNN continued to report that sources believe TRUMP is very fond of the IEEPA basis, as IEEPA gives the President broad powers in how to implement tariffs. However, another informed person said that TRUMP's team is currently only discussing which legal basis to adopt, and has not yet made a final decision on whether to use IEEPA.
In addition, another basis the TRUMP team is evaluating is the possibility of using Section 338 of the US Trade Act, which allows the President to impose new or additional tariffs on countries deemed to discriminate against US businesses. Meanwhile, the Trade Act known as Section 301 is also within TRUMP's consideration, which allows him to impose preliminary tariffs on CHINA on national security grounds.
In summary, TRUMP's tariff policy seems to be a must. Nick Iacovella, Vice President of the Coalition for a Prosperous America, commented:
TRUMP understands that for economic development and national security, the US must rebuild its industry, which will benefit American workers and communities, and to achieve this goal, TRUMP must resort to tough trade policies, including tariffs.
Fed Governor: If inflation falls this year, will support further rate cuts
We know that recently, due to the Fed's reduced expectations for rate cuts this year, coupled with market concerns that TRUMP's tariff and tax cut policies after taking office may reignite inflation, US stocks and cryptocurrencies have come under negative pressure.
However, on yesterday (8th), Fed Governor WALLER released a dovish signal, saying that although US inflation was above the 2% target at the end of 2024, based on market expectations and short-term inflation data, the US inflation situation still needs to be further improved, and he expects inflation to continue to decline this year, and supports the view of further rate cuts:
Although the slow progress of inflation has led to calls to slow or pause rate cuts, the medium-term inflation target will continue to move towards 2%, and further rate cuts are reasonable.
Small non-farm employment lower than expected
Additionally, the US authorities also released the ADP employment report, known as the "small non-farm", last night. The data showed that the seasonally adjusted number of private sector jobs increased by 122,000 in December, lower than the 139,000 previously expected by economists, and far lower than the 146,000 in November, the slowest growth since August last year.
For the Fed, which wants to see the economic momentum slow down, this is an economic data that supports rate cuts.
