Ahead of the Tape
Easy Money Tugs Two Ways at Trade Gap</br></br>The trade deficit is a case study in the unintended consequences of easy money.</br></br>The Commerce Department releases April trade data Wednesday morning. Economists think the deficit widened a bit, to $29 billion, from $27.6 billion in March. That would end an eight-month streak of narrower deficits that has cut the gap roughly in half, thanks first to a surge in exports and then to tumbling oil prices.</br></br>A narrower trade deficit is potentially good economic news on several fronts. For one, from an accounting perspective, exports add to gross domestic product, while imports subtract from it. From a fundamental standpoint, it is often healthier for a country to export more than it imports -- though collapsing imports can also signal weak demand at home, as they have in this recession.</br></br>Here's where the unintended consequences of fighting that recession come in: The money being pumped into the economy by the Federal Reserve has made some investors anxious about inflation, sometimes defined as the result of too much money chasing too few goods.