US markets are not taking the Trump tariff proposals very seriously—stock prices increased after the election and 10-year Treasury yields have returned to pre-election levels, although they did spike ~0.1% after the election. Maybe the Treasury pick reassured investors?
If you believe otherwise, I encourage you to bet on it! I expected both yields and stocks to go up and am quite surprised.
I’m not sure what the markets expect to happen—Trump uses the threat of tariffs to bully Europeans for diplomatic concessions, who then back down? Or maybe Trump backs down? There’s also talk about Trump’s policies increasing the strength of the dollar, which makes sense. But again, net zero inflation from the tariffs is pretty wild.
The Iranian stock market also spiked after the US elections, which… what?
The Iranian government has tried to kill Trump multiple times since he authorized the assassination of Solemani. Trump tightened sanctions against Iran in his first term. He pledges even tougher sanctions against Iran in his second. There is no possible way he can be good for the Iranian economy. Maybe this is just a hedge against inflation?
The meeting allegedly happened on the 11th. The Iranian market rallied immediately after the election. It was clearly based on something specific to a Trump administration. Maybe it’s large-scale insider trading from Iranian diplomats?
I also think the market genuinely, unironically disbelieves everything Trump says about tariffs in a way they don’t about his cabinet nominations (pharma stocks tanked after RFK got HHS).
The man literally wrote that he was going to institute 25% tariffs on Canadian goods, to exactly zero movement on Canadian stocks.
If I were guessing I might say that maybe this is happening:
Right now the more trade China has with Iran the more America might make a fuss. Either complaining politically, putting tariffs, or calling on general favours and good will for it to stop. But if America starts making a fuss anyway, or burns all its good will, then their is suddenly no downside to trading with Iran. Now substitute “China” for any and all countries (for example the UK, France and Germany, who all stayed in the Iran Nuclear Deal even after the USA pulled out).
US markets are not taking the Trump tariff proposals very seriously—stock prices increased after the election and 10-year Treasury yields have returned to pre-election levels, although they did spike ~0.1% after the election. Maybe the Treasury pick reassured investors?
https://www.cnbc.com/quotes/US10Y
If you believe otherwise, I encourage you to bet on it! I expected both yields and stocks to go up and am quite surprised.
I’m not sure what the markets expect to happen—Trump uses the threat of tariffs to bully Europeans for diplomatic concessions, who then back down? Or maybe Trump backs down? There’s also talk about Trump’s policies increasing the strength of the dollar, which makes sense. But again, net zero inflation from the tariffs is pretty wild.
The Iranian stock market also spiked after the US elections, which… what?
https://tradingeconomics.com/iran/stock-market
The Iranian government has tried to kill Trump multiple times since he authorized the assassination of Solemani. Trump tightened sanctions against Iran in his first term. He pledges even tougher sanctions against Iran in his second. There is no possible way he can be good for the Iranian economy. Maybe this is just a hedge against inflation?
Musk met with Iran ambassador. maybe the market thinks they cut a deal?
The meeting allegedly happened on the 11th. The Iranian market rallied immediately after the election. It was clearly based on something specific to a Trump administration. Maybe it’s large-scale insider trading from Iranian diplomats?
I also think the market genuinely, unironically disbelieves everything Trump says about tariffs in a way they don’t about his cabinet nominations (pharma stocks tanked after RFK got HHS).
The man literally wrote that he was going to institute 25% tariffs on Canadian goods, to exactly zero movement on Canadian stocks.
That Iran thing is weird.
If I were guessing I might say that maybe this is happening:
Right now the more trade China has with Iran the more America might make a fuss. Either complaining politically, putting tariffs, or calling on general favours and good will for it to stop. But if America starts making a fuss anyway, or burns all its good will, then their is suddenly no downside to trading with Iran. Now substitute “China” for any and all countries (for example the UK, France and Germany, who all stayed in the Iran Nuclear Deal even after the USA pulled out).