Bloomberg Businessweek
ICYMI: More Trump Market Volatility
Apr 8, 2025
Cheryl Smith, an economist and portfolio manager at Trillium, dives into the turbulent waters of market volatility driven by Trump's trade war. She discusses the unpredictable changes in stock, bond, and commodity prices due to inconsistent tariffs. Smith also analyzes how rising Treasury yields are reshaping investor behavior and the Federal Reserve's cautious approach. Lastly, she highlights the historical implications of tariff policies, drawing parallels to past economic crises and the looming risk of recession.
06:49
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Quick takeaways
- Trump's fluctuating tariff policies create significant market uncertainty, leading to increased precautionary saving and delayed consumer purchases.
- The heightened market volatility and investor anxiety are exacerbated by the Federal Reserve's reluctance to intervene amid ongoing trade war concerns.
Deep dives
Impact of Tariff Policies on the Economy
The podcast highlights the significant consequences of recent tariff policies, emphasizing their potential to create chaos in the market. The fluctuating nature of these tariffs, where President Trump frequently alters his stance, contributes to uncertainty, making it challenging for businesses and consumers to plan effectively. For instance, this unpredictability can lead to increased precautionary saving among consumers, who may delay purchases out of fear of worsening economic conditions. Additionally, industries requiring long-term investments, such as manufacturing, face difficulties in making decisions, which could ultimately hinder economic growth and increase the risk of recession.
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