This is the web version of the WSJ’s economic newsletter. You can sign up for daily delivery here. Good morning! Today we look at a full week for economic news, starting with fallout from the weekend’s Group of Seven summit, the Fed’s next move on interest rates, low rumblings on corporate taxes, signs of risks in the auto loan market, and China’s purchase of enough cotton to make 400 million T-shirts. BLAME CANADA President Donald Trump headed off to a summit with North Korea’s Kim Jong Un, a long-time U.S. foe, as the Group of Seven meeting with America’s closest allies devolved into something personal between Mr. Trump and Prime Minister Justin Trudeau. The latest development comes as the U.S. enters a crucial stretch for trade talks with China, Nafta nations and its trade partners in Europe. For now, American relations with its closest allies appear frayed. Mr. Trudeau Canada “will not be pushed around.” German Chancellor Angela Merkel said that it was “sobering and somewhat depressing” to learn Mr. Trump wouldn’t endorse a final G-7 communiqué. If the U.S. was hoping for help from Western allies in confronting China’s overcapacity in steel and damaging intellectual property practices, those prospects now appear dimmer. Does that make deals with China, and perhaps Korea, more likely? GOOD, OLD BORING FED Tired of global trade ructions? Let’s pivot to the much more sober Federal Reserve. Fed officials meet Tuesday and Wednesday. The big question isn’t whether they will raise interest rates—they will—but rather how to frame plans for the rest of the year, Fed watcher Nick Timiraos writes. The debate: how to ensure the rapidly expanding U.S. economy doesn’t overheat. In March, Fed officials were equally split between a total of three or four rate increases for 2018. Economists now firmly expect four. In the backdrop: The bright domestic economic outlook contrasts with a cloudier picture abroad. Trade tensions, the election of populist parties in Italy, and turmoil in emerging markets have all developed as risks. Do you think the U.S. economy is at risk of overheating? Write to Jeffrey Sparshott at email@example.com, tweet to @WSJecon and visit wsj.com/economy for the latest. WHAT TO WATCH THIS WEEK This week features the Trump-Kim summit; policy decisions from the Federal Reserve, European Central Bank and Bank of Japan; U.S. inflation, retail sales and industrial production; China industrial output, investment and retail sales; plus likely developments on the trade policy/hostility front. TOP STORIES EYE ON TAXES Taxes on U.S.-based multinationals would go up under a proposal from a handful of liberal House Democrats—including Reps. Peter DeFazio of Oregon and Rep. Lloyd Doggett of Texas. Their bill won’t go anywhere with Republicans in charge of Congress, but it’s an early indication of Democrats thinking through alternatives to the tax law that Congress passed last year, WSJ tax guru Rich Rubin writes. The bill would increase what’s known as GILTI—the minimum tax on U.S. companies’ foreign earnings—and apply it on a per-country basis instead of letting companies average their global tax rates. Politically, that’s easier than raising the corporate tax rate back from 21%, because it can be sold as making sure that U.S.-based companies pay the same taxes at home and abroad. The challenge, however, is that increasing the cost of having a U.S. headquarters increases the incentives for companies to engage in inversions and other transactions that give them foreign addresses. BRAND NEW CADILLAC New risks are lurking in auto loans. As loan growth slows, banks and other lenders have been tinkering with loan terms in an effort to gain more consumers. They are originating a greater share of loans with repayment periods of more than five years and, in some cases, extending loans to consumers who are stretching further to afford their purchases. The moves come at an unsettled time for auto lending. Sales growth has been choppy and missed payments are up from a year ago. Also, used-car prices are under pressure, raising the risk of higher losses for lenders when vehicles are repossessed, AnnaMaria Andriotis and Christina Rexrode report. BOLD MOVE COTTON China has purchased futures contracts covering more than 361,000 bales of U.S. cotton for 2019-20. That’s enough to make 400 million T-shirts. China has never booked that much cotton that far in advance at this time of year, in data going back to 1998, Julie Wernau reports. China’s return to global cotton markets is likely to mean a period of higher prices for a fiber used in most apparel, textiles and upholstery. It is also a boon to U.S. producers. Is that a little downpayment on a pledge to buy more U.S. products? A reminder of how much sway China holds over markets? Or something purely commercial? SWISS MISS In the end, it wasn’t even close. Swiss voters overwhelmingly rejected a controversial proposal to bar commercial banks from creating money, Brian Blackstone writes, a victory for the central bank. The Vollgeld Initiative, also known as Sovereign Money, attracted international attention because it would have upended the banking system in a country known for its banks. Financial institutions in Switzerland and around the world create electronic money every day when they lend to households and businesses. But Vollgeld supporters wanted the Swiss National Bank to create all the money in the economy, putting it in direct control of the money supply. Swiss voters, in a landslide, opted to maintain the status quo. Only 24% of voters supported the initiative. QUOTE OF THE DAY “There’s a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door. And that’s what bad faith Justin Trudeau did with that stunt press conference. That’s what weak, dishonest Justin Trudeau did. And that comes right from Air Force One.” – White House trade adviser Peter Navarro, speaking on “Fox News Sunday” TWEET OF THE DAY [wsj-responsive-sandbox id = "0" ] WHAT ELSE WE’RE READING How far has the U.S. come since World War II? It’s hard to deny some massive economic gains. It’s also hard to ignore a degree of stagnation for large swathes of the population. “The historical data…reveal that no progress has been made in reducing income and wealth inequalities between black and white households over the past 70 years, and that close to half of all American households have less wealth today in real terms than the median household had in 1970,” the University of Bonn’s Moritz Kuhn, Moritz Schularick and Ulrike Steins write. That whole Golden Rule thing—it’s not just a two-way street. In the latest edition of the Royal Economic Society’s Economic Journal, Redzo Mujcic and Andreas Leibbrandt study traffic in a large urban parking garage. “More specifically, we study the likelihoods with which drivers give up their right of way and stop to help other drivers…. We find that subjects are more than twice as likely to act generously and stop after someone else has stopped for them.” Pay it forward, my friends. Looking for signs of a looming recession? You won’t find it in a measure stock options. Queen Mary University’s George Skiadopoulos and his colleagues devised a new economic indicator based on risk aversion in markets. “Implied Relative Risk Aversion is currently quite low…implying that traders in the S&P 500 options market anticipate an increase in U.S. economic growth,” Mr. Skiadopoulos writes in MarketWatch. UP NEXT: TUESDAY German economic sentiment for June is due out at 5 a.m. ET. The NFIB small business survey for May, out at 6 a.m. ET, is expected to rise to 105.1 from 104.8 the prior month. The U.S. consumer price index for May is expected to rise 2.7% from a year earlier, accelerating from April’s 2.5%. Excluding food and energy, CPI is expected to rise 2.2%. The Senate Banking Committee at 10 a.m. ET is scheduled to vote two Fed nominations: Richard Clarida as vice chairman, and Michelle Bowman as a member of the board of governors.