Tariff Tantrum Scenario
Explained below is how the market can go up even more in the coming 3 months.
If inflation moves down really fast + the FED not cutting rates fast enough — that can cause real rates to rise which likely = equities sell off.
Delinquencies are NOT rising.
Credit risk remains low
"Credit spreads remain at cycle lows" Therefore, the amount of growth risk
... See moreThis strategy is already in motion:
DXY is falling
Rates are easing
Oil is down
Financial conditions are loosening
Liquidity proxies are turning up
Markets are panicking over tariffs...
But this is Mar-a-Lago mechanics at work. (FX & flows)
DXY is falling
Rates are easing
Oil is down
Financial conditions are loosening
Liquidity proxies are turning up
Markets are panicking over tariffs...
But this is Mar-a-Lago mechanics at work. (FX & flows)
Paul Guerra • Tweet
In the first half of 2025, annualized construction spending on manufacturing facilities is decreasing, not increasing, indicating that there is thus far no major investment into relocating supply chains to the United States in response to tariffs. Generally speaking, carrots (subsidies) have a bigger impulse to action than sticks (tariffs) because
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