Yield Curve Blares Loudest U.S. Recession Warning Since 2007; Asia Surprises With Cuts in Global Race to Monetary Bottom; U.S. Collected $63 Billion in Tariffs Through June

• Rates on 10-year notes sank to 1.714% on Monday, completely erasing the surge that followed President Donald Trump’s 2016 election
• At one point, they yielded 32 basis points less than three-month bills, the most extreme yield-curve inversion since the lead-up to the 2008 crisis
• The moves follow reports that China is responding to the American president’s threat of more tariffs by allowing the yuan to fall and halting imports of U.S. agricultural products

• Three central banks across Asia Pacific delivered surprise interest-rate decisions on Wednesday
• New Zealand and India led with bigger-than-expected interest rate cuts, while Thailand’s 25-point reduction was a surprise
• Policy makers are taking bolder steps to bolster their economies as escalating U.S.-China trade tensions threaten to worsen global growth and currency battles roil financial markets

• As of June 30, the U.S. government has collected $63 billion in tariffs over the preceding 12 months and is on a pace to generate $72 billion in tariffs annually
• In June, more than $3 billion of the monthly tariff revenue, over half of the total, came from China alone
• However, China is no longer U.S.’s largest trading partner, now behind Mexico and Canada. So, if the trade further declines, there will be a lower volume of imports on which to assess the tariffs