Know Your Risk Podcast Tariff Impact on Exports & Competitiveness
Aug 20, 2025
The discussion delves into the complex effects of tariffs on exports, highlighting risks like unemployment and inflation. It examines the balancing act required to support domestic industries while maintaining global competitiveness. The potential negative impacts of current tariff policies on economic growth are thoroughly explored, with calls for urgent reforms to safeguard future prosperity. Historical insights into market trends enhance the understanding of the challenges posed by trade barriers.
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Market Mechanics Can Amplify Downturns
- Market structure (negative gamma, vol control selling, CTAs) can amplify mechanical-driven corrections.
- A moderate down move with hawkish Fed signals could trigger self-reinforcing selling and a sharp correction.
Data, Not Minutes, Will Drive September
- Fed minutes read hawkish but were published before key jobs and inflation prints shifted views.
- Upcoming jobs and inflation releases will strongly influence September rate-cut odds and Fed messaging.
Jobs-Inflation Historical Divergence
- Unemployment is currently far below its 20-year average while core inflation sits above its 20-year average.
- That divergence strengthens the Fed's dilemma between defending inflation and responding to strong labor markets.