It’s a bird, it’s a plane…no, it’s interest rates! Rising interest rates do not kill bull markets; they actually go hand-in-hand. I know this is counter to what you have learned from every financial media outlet and the short-term traders who often sit at their desks, but it is true. In fact, it is “textbook,” as they say.
The big question for our economy is: How much of the good done by tax reform and regulatory relief is being undone by tariffs?
Different people see the world differently, and until you learn that, it can be difficult to communicate with someone who simply does not see what is so plain to see from your perspective. For me, it is connections. I see connections almost everywhere and sometimes I can grow impatient with people who don’t see it….
This market is becoming more and more fixated on trade and it is getting ahead of itself. The market, after all, does not reflect the present; it reflects the consensus of what the future will look like. When the trade talk started it reflected winners and losers; now in the past few days it has seemingly shifted to predicting that everyone will lose.
Thus far the trade reality is much less dire than the trade banter coming from the White House. However, that banter can have a very negative impact. Economics in the real world is not the cold social science many academics make it out to be. Psychology plays a very big role.
