THE HOUR OF TRUTH DRAWS NEAR IN THE UNITED STATES 3/3

18 Jul

THE HOUR OF TRUTH DRAWS NEAR IN THE UNITED STATES 3/3

Fixed-income markets face a challenging dilemma, caught between the opposing forces of inflationary risks and fears of a sharp economic slowdown. This difficult situation is largely due to the dual nature of Trump's tariff policy, which is poised to be both inflationary by raising import prices and recessionary by dampening consumer spending and business investment.

Key Points

  • GDP likely but misleading to rebound in Q2
  • Economy withstands Trump-induced chaos
  • Leading indicators remain indecisive
  • Employment shows signs of cracking
  • Dilemma remains intact for Fed
  • Price indices yet to react to tariffs
  • Between recession and inflation rates also waver
  • Chaos has not been kind to the dollar
  • Rebalancing in favor of more defensive sectors