Comments on: The Sleight of Hand Behind the ‘One-Time Adjustment’ and ‘Transitory’ Tariff Inflation Narrative https://inflationwatch.drduru.com/the-sleight-of-hand-behind-the-one-time-adjustment-and-transitory-tariff-inflation-narrative/?utm_source=rss&utm_medium=rss&utm_campaign=the-sleight-of-hand-behind-the-one-time-adjustment-and-transitory-tariff-inflation-narrative Watching for inflation here, there and everywhere Tue, 01 Jul 2025 08:39:49 +0000 hourly 1 https://wordpress.org/?v=7.1.4 By: Powell vs. Waller: Divided Fed Faces Tariff-Driven Inflation Uncertainty | Inflation Watch https://inflationwatch.drduru.com/the-sleight-of-hand-behind-the-one-time-adjustment-and-transitory-tariff-inflation-narrative/#comment-352 Tue, 01 Jul 2025 08:39:49 +0000 https://inflationwatch.wordpress.com/?p=3714#comment-352 […] if tariffs are hiked all at once in a one-and-done fashion. Otherwise, this reassurance reinforces the same argument Treasury Secretary Bessent made at the beginning of the tariff drama, trauma, and noise. Assuming that long-term inflation […]

]]> By: A Calm Before Fresh Inflation Agitation? | Inflation Watch https://inflationwatch.drduru.com/the-sleight-of-hand-behind-the-one-time-adjustment-and-transitory-tariff-inflation-narrative/#comment-351 Thu, 12 Jun 2025 17:44:17 +0000 https://inflationwatch.wordpress.com/?p=3714#comment-351 […] San Francisco did not provide anecdotes or data on planned price hikes. However, one alarming anecdote came from a business which noted that tariff-related price hikes were not rolled back along with the related rescinded tariff. This inflation “stickiness” is a worrying indicator of how tariff-driven price hikes can cause lasting, cascading price pressures in the economy. […]

]]> By: Inflation Concerns Rise at the Federal Reserve Amid Tariff Unease | Inflation Watch https://inflationwatch.drduru.com/the-sleight-of-hand-behind-the-one-time-adjustment-and-transitory-tariff-inflation-narrative/#comment-350 Fri, 11 Apr 2025 03:36:39 +0000 https://inflationwatch.wordpress.com/?p=3714#comment-350 […] Scott Bessent’s line that tariffs are a “one-time price adjustment.” But as I wrote in “The Sleight of Hand Behind the ‘One-Time Adjustment’ and ‘Transitory’ Tariff Inflation Narra…“, for inflation to be transitory, expectations for price levels would need to revert after […]

]]> By: Why TIPS Failed Spectacularly In 2022… And Is NOW the Time to Buy? | Inflation Watch https://inflationwatch.drduru.com/the-sleight-of-hand-behind-the-one-time-adjustment-and-transitory-tariff-inflation-narrative/#comment-349 Sun, 30 Mar 2025 23:49:19 +0000 https://inflationwatch.wordpress.com/?p=3714#comment-349 […] alternative to cash for the conservative part of a portfolio. Even with tariffs creating a “one-time price adjustment higher” in prices, GTIP should get quite a boost in the coming year. Rate cuts from the Fed will […]

]]> By: Jerome Powell’s Fed Deftly Maneuvers Through a Stagflationary Minefield | Inflation Watch https://inflationwatch.drduru.com/the-sleight-of-hand-behind-the-one-time-adjustment-and-transitory-tariff-inflation-narrative/#comment-348 Thu, 20 Mar 2025 05:26:26 +0000 https://inflationwatch.wordpress.com/?p=3714#comment-348 […] that can be the case in the case of tariff inflation.” I critiqued this explanation in “The Sleight of Hand Behind the ‘One-Time Adjustment’ and ‘Transitory’ Tariff Inflation Narr…“. While a tariff can impose a one-time price adjustment, that adjustment embeds higher costs […]

]]> By: Gary H https://inflationwatch.drduru.com/the-sleight-of-hand-behind-the-one-time-adjustment-and-transitory-tariff-inflation-narrative/#comment-347 Tue, 11 Mar 2025 15:21:36 +0000 https://inflationwatch.wordpress.com/?p=3714#comment-347

I accidentally stated the inverse of your trade, but you answered my question as I intended :-).

]]> By: Dr. Duru https://inflationwatch.drduru.com/the-sleight-of-hand-behind-the-one-time-adjustment-and-transitory-tariff-inflation-narrative/#comment-346 Sun, 09 Mar 2025 16:15:24 +0000 https://inflationwatch.wordpress.com/?p=3714#comment-346 I’m actually short USD/MXN and long USD/CAD. If I did CAD/MXN it would be to short it given my claims: 1) I can collect premium from the interest rate differential and 2) the Canadian dollar has not priced in as much damage from economic warfare as the Mexican peso has. However, I prefer splitting up the trade mainly because the dollar pairs offer more flexibility and liquidity. Moreover, I still have to be mindful of country-specific events (like central banks) which may force me to make adjustments. Those adjustments are easier to do when MXN and CAD are not combined in one pair.

]]> By: Gary H https://inflationwatch.drduru.com/the-sleight-of-hand-behind-the-one-time-adjustment-and-transitory-tariff-inflation-narrative/#comment-345 Sun, 09 Mar 2025 12:45:09 +0000 https://inflationwatch.wordpress.com/?p=3714#comment-345 Fascinating! I’m curious about one thing. As someone who has not been able to develop an intuitive feel for currency trading (despite trying): if you’re short USD/CAD and long USD/MXN as a pairs trade, is there an equivalent CAD/MXN trade? What characteristics of the two positions would differ?

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