Word on the Street #316 US trade shock
7 snips
Apr 7, 2025 Financial markets are reeling from new US tariff policies, with a universal 10% tax on imports stirring up complex reactions. Investor sentiment is shaken, leading to sell-offs in equities and shifts in bond yields. The discussion delves into the challenges of navigating this economic uncertainty, as inflation worries mount. Experts emphasize the importance of long-term investment strategies and consider the Federal Reserve's role in tackling these turbulent times. History and technology's impact on predictions also come into play.
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Trade War Dynamics
- The US tariff strategy seems directed by President Trump, not economic advisors.
- China's retaliation may be a calculated response to a perceived bluff.
Market Panic
- Market reactions to tariffs have been swift and severe, resembling crisis periods like COVID.
- The speed and magnitude of the drops hint at potential economic consequences.
Market Performance
- Non-US stock markets performed well before last week, possibly due to unwinding themes like AI and US exceptionalism.
- The falling dollar adds to losses for non-US investors in US stocks.