Clinton adviser James Carville famously quipped that he would like to be reincarnated as the bond market but, as President Donald Trump is now finding out, the equity market can be pretty intimidating too, with the S&P 500 down by more than 10% since his Rose Garden tariff announcement last Wednesday. We suspect that even the pugnacious Trump must understand he’s gone too far this time. Although uncertainty remains very elevated, the most likely next step is that Trump will quickly announce a few “deals” that reduce the prohibitive reciprocal tariffs rates on some of the hardest hit countries.
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