Federal Excise Tax data showed that the US economy was unobstructed in May. The data was not in collusion with the mainstream Wall Street narrative. That narrative, which virtually everybody believes, is that the US economy is weakening and the Fed will cut interest rates.
This report is partly an excerpt from the June 5 Liquidity Trader Report. First time subscribers get a one month free trial if you sign up by 11:59 PM Pacific Time, Wednesday, June 6. The first 90 days are risk free.
Data from the May 31 Daily Treasury Statement showed that Excise Tax deposits rose 3.8% year to year, in May. That’s solid. It reflects unit volume, and therefore contains no inflation component. This data suggests that the Fed has no economic reason to ease monetary policy. It has no excuse to perform the Kabuki theater of cutting rates.
Withholding tax data, also covered in the Liquidity Trader report, was less clear. But even with that, it suggested that the ADP negative surprise won’t show up in Friday’s nonfarm payrolls report.
Federal Excise Tax Data Gives Fed No Excuse
This chart is limited to deposits of excise taxes only. Growth picked up in April and that trend continued in May, with a gain of 3.8%. May collections reached a record for that month. There’s no economic reason for the Fed to cut rates. In other words, there’s no obstruction to the economy that would give the Fed an excuse! And there’s no collusion with the fake Wall Street news spewed out by the Street’s media handmaiden.
I can’t say that the Fed definitely won’t cut rates. But if it does, it won’t be because of a weak economy. It will be because Trump has intimidated Powell and the Fed gang, and is scaring the crap out of them with his behavior on the world economic stage.
Of course, if the Fed does cut rates, Trump will have gotten exactly what he wants, and it will only encourage him to act out even more.
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