Bloomberg Surveillance Bloomberg Surveillance TV: December 20, 2024
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Dec 20, 2024 Jordan Rochester, Head of Macro Strategy at Mizuho, and Jim Caron, CIO at Morgan Stanley Investment Management, dive into pressing economic issues. They discuss President-elect Trump's tariff threats, questioning their seriousness and implications. Caron highlights the recent equity selloff as a healthy market correction. The conversation also touches on currency trends, anticipated interest rate changes, and the potential impacts of infrastructure investments, offering a comprehensive outlook as 2025 approaches.
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EU Tariff Threat
- The EU hopes to avoid tariffs by increasing LNG imports from the US, mirroring a 2018 strategy.
- However, sufficient increases to offset the trade deficit are unlikely, making tariffs a real possibility.
Euro Dollar Outlook
- The Euro's 5% decline against the dollar this year could worsen due to tariffs and European macroeconomic weakness.
- However, a potential turning point exists if tariffs aren't implemented immediately upon Trump's inauguration.
Market Drivers
- Trump's trade policies, particularly potential tariffs, are currently the dominant market driver.
- After tariff decisions are made, focus will shift back to inflation and GDP data.