Our Bond Was Our Word
The market seems to have come to terms with the fact that all the tariffs have not been paused and team behind the wildly unclear strategy for those tariffs is still running the show. Hence, today’s plunge. There are countless theories as to why Trump retreated from initial tariff proposals. The most likely reason was the action in the bond market. Long story short, investors around the world have started to lose faith in the US. “Normally when investors are this scared they seek safety, and nothing is safer than the dollar and Treasury debt. But despite mounting fear of recession, the usual flight to safety hasn’t materialized. That is for several reasons, some relatively superficial, such as inflation risks, and one more fundamental.” WSJ (Gift Article): The Dollar and the Bond Market’s Ominous Message for Trump.
+ Here’s the latest: US stocks plunge, dollar tumbles as reality sets back in on Wall Street.
+ “Now, Beijing knows that Trump not only blinked, but he so alienated our allies, so demonstrated that his word cannot be trusted for a second, that many of them may never align with us against China in the same way. They may, instead, see China as a better, more stable long-term partner than us. What a pathetic, shameful performance. Happy Liberation Day.” Tom Friedman in NYT (Gift Article): What Trump Just Cost America.
+ Anne Applebaum in The Atlantic (Gift Article): This Is Why Dictatorships Fail. “In the past 48 hours, Donald Trump has just given us a pitch-perfect demonstration of why legislatures are necessary, why checks and balances are useful, and why most one-man dictatorships become poor and corrupt. If the Republican Party does not return Congress to the role it is meant to play and the courts don’t constrain the president, this cycle of destruction will continue and everyone on the planet will pay the price.”
+ So the GOP saw the warning signals of economic thinking that tanked the world’s markets and decided to rethink the budget being pushed by the same team, right? Well, not exactly. House adopts budget blueprint for Trump’s agenda after GOP leaders sway holdouts.
