Trump goes for shock therapy

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Good morning, things happened in the US market before 9pm yesterday, but who knows. The White House tariff announced the investors carried enough punch to erase short -term memories. Email us with thoughts in the new world: robert.armstrong@ft.com And iden.reeter@ft.comThe

Now it is fighting

Histor Tihasiks may try to reconstruct how the Trump administration reached one day Tariff rate It announced yesterday. At that time the process will only be of academic interest. This morning it is not interested at all. What is important is that America has almost curiously aggressively attacked its trade partners, countries – and investors – guess how long it can hold this pose.

We Wrote The average US tariff rate on Wall Street for “Liberation Day” at the beginning of the week was increased by an average US tariff rate by 10-20 percent, most of the lower half analysts in the lower half of the range. The Declaration The combination of 10 percent of the minimum rate and much higher rate in certain countries will make the number at the top end of the boundary and probably much higher. Blue shearing at capital economic calculates the average rate of 19 percent; The inflation has run the Omair Sharif number of insights and reaches 25-30 percent. It is the feature of the Trump White House that this national result will leave the place for disagreement about the event.

In China and Asian countries, such as Vietnam, Cambodia and Indonesia’s proposed tariff rates were especially high. China faces the total tariff above 50 percent – they may even go Superior – And the administration was obviously interested in breathing any supply chain that could act as a Chinese median or alternative.

The announcement should be emphasized on it, a very important trade feature. As expected and expected, Canada and Mexico do not hit additional tariffs, the USMCA trade agreement (which was discussed with Trump) has been unskilled in most cases. This means the effective tariff rate of cars made in North America will probably be less than 25 percent in cars in other parts of the world.

Although this dovish side has surpassed by ambiguity. The regions that are expected to be expected – pharmaceutics, copper, wood – especially the national rate. But of course it is delayed than recovering. More importantly, the opportunity for discussion is unclear. Asked about this YesterdayTreasury Secretary Scott Besent speaks like a person who is not briefed: “To see what he wants to do, depending on President Trump; I think the mentality is probably allowed for a while.”

What will bring for the market today? As we write, things look ugly. Nasdak 100 Futures have decreased by about 4 percent and S&P 500 Futures by about 3 percent. Bitcoin, the wealth that hedged, fell. Gold, which shows fear, roses. On a classic flight of protection, the yields fell in the treasury of all maturity, weakening the dollar.

However, what can happen in the market today – the roads above, down or on the side will surprise us a lot. Today’s news will take time to digest. But here are some basic thoughts about the effects:

• Growth: Low. This is a huge new tax, and the taxes are pulling on growth as everything else is equal. “The Negative GDP Impact will be greater than the expected 0.5-1 per cent because us consumer spending and constituency had already begun to slow down for cycical reasons. Resulting in a Reduction of Job Opening, Lower Income and a Further Reduction of Recession Odds.

• Inflation: Higher, at least in the short term. The Samuel Terms of the Pantheon Samctic Economics mentioned that if all these tariffs are effective and the tariffs in Canada and Mexico rise to 25 percent it will pick up the original PCE ” [price index] About 2 percent “. Do not assure them by short inflation after the tariff of first Trump.

• Federal Fund Rate: To say soon. Slow rise and rising prices complicate both sides of the Federal Reserve order. It indicates staggering. Fed was already predicting something for this effect. However, yesterday’s announcement was more dramatic than expected by the policy committee, Klodia Khem, the New Century advisers. After the announcement, the Future Market has enhanced its estimates for the number of Fed cuts this year. Sahum thinks it may be a mistake. After years of inflation, “Fed’s bias toward reducing inflation. They used to cut their legs to cut,” he said.

• Stock: Beirish. View comments about the increase.

• Treasury: Bullish. “This is a perfect environment, where investors have no [informational] Facility. In this kind of environment you need to take risks, “PGIM stable income Gregory Peters said.” What I feel quite confident about the issue is the market. The The This news reduces the expectations of growth, “supports the treasury.

• Inflation-indicated Treasury: Bullish. Edward al-Husseini of Colombia Threadnal said, “Most of the time I hate them,” but they give you the advantage of the markets because its risk stops, and you too may have an inflation tendency. Tips [or Treasury inflation protected securities] Perform the best when the break-eon inflation is over and the original yield is reduced. We cannot stay in that kind of environment for a long time, but we think we are now. ”

Trump has established a pattern of bold pronunciation after an instant retreat, and this time it may be again. However, yesterday it was felt differently, both of the run-up hype and the perfect commitment to the day. There will be some sudden twist in the months ahead. But not going back.

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