Our take on the U.S. tariff pause

Apr 14, 2025

Discover insights on market policy uncertainties and how they can shape your investment strategies. The conversation emphasizes a cautious approach amid volatility while highlighting optimistic prospects for U.S. and Japanese equities. The experts also make a case for gold as a preferable choice over traditional safe havens like long-duration U.S. treasuries. Tune in for valuable perspectives on navigating the current investment landscape!

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INSIGHT

Policy Uncertainty

High policy uncertainty makes prediction difficult; focus on potential triggers for policy shifts.
This approach helps understand market reactions and manage investment risks.

ADVICE

Investment Horizon

Consider a shorter-term investment horizon (3 months) during times of high policy uncertainty.
When uncertainty decreases, extend the horizon (6-12 months) and consider a more positive outlook on risk assets.

INSIGHT

Checks on Policy

Checks on maximal policymaking stances can reduce near-term financial risks.
This allows for a more positive outlook on investments like U.S. and Japanese equities.

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The 90-day pause of tariffs on most countries and exemption of key tech imports suggest the U.S. administration is taking some account of financial risks and costs as well as a country’s willingness to engage. It shows there are factors that could put a check on the administration’s maximal tariff stance. As a result, late last week we extended our tactical horizon back to six to 12 months to dial up risk. Yet we still think tariffs can hurt growth and lift inflation, and major uncertainty remains.

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