Capital Ideas Podcast
Tariff impacts on global markets
May 1, 2025
Jody Jonsson and Chit Purani, both Capital Group portfolio managers, dissect the impacts of rising tariffs on global markets. Jody provides insights on equity market volatility, stressing the importance of diversification and long-term strategies amid trade tensions. Chit discusses fixed income strategies, focusing on interest rate duration and credit quality for portfolio resilience. They share valuable lessons from past economic downturns, emphasizing adaptability and patience for investors navigating uncertain times.
34:27
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Quick takeaways
- Rising tariffs and trade disputes are reshaping traditional investment landscapes, leading to increased uncertainty and reassessment of safe haven status in the U.S.
- Investors are encouraged to seek long-term opportunities by diversifying portfolios, focusing on sectors like technology and defense that may thrive amidst geopolitical changes.
Deep dives
Restructuring Global Economic Order
The current global economic environment is marked by a fundamental restructuring that challenges the longstanding geopolitical and economic norms established after World War II. This shift results in increased uncertainty that complicates investment decisions, as traditional assumptions about trading relationships and supply chain stability come into question. The market's difficulty in digesting these changes has led to higher discount rates, a significant stock market correction, and a decline in the value of the dollar. Investors are beginning to reassess the traditional safe haven status of the U.S. as external conditions evolve, especially amidst rising tariffs and trade disputes.
