Thread by @Brad_Setser

Good @Neil_Irwin column on the current, somewhat synchronized, global slowdown -- and the signal global bond markets are now sending.

nytimes.com/2019/08/14/ups…

1/x

@Neil_Irwin Some of this is the fall out from the Sino-American trade war, but not all. I have trouble linking the trade war directly to Europe's slowdown (Europe should benefit from trade diversion even as it is hurt by the impact of trade uncertainty on investment)

2/x

@Neil_Irwin A couple of signals that I think are important --

U.S. (non-petrol) exports are falling fast -- and that isn't just a function of the trade war.

Some of that is dollar strength, but it reflects the global slowdown

@Neil_Irwin And China remains weak. The IMF is happy that China didn't overstimulate in response to the trade tension (also see @Birdyword). But right now China is -- through falling imports of manufactures -- providing a negative impulse to global growth.

4/x

@Neil_Irwin @Birdyword I won't repeat my arguments in this blog -- but the slowdown in China's imports isn't simply a direct function of the trade war with the US (China doesn't import that many manufactures) from the US. Nor is it just lower chip prices.

5/5

cfr.org/blog/continuin…