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Fernando Primo de Rivera's avatar

Totally agree. Total complacency. Tariff deals are good narrative has taken over in markets. True, these will save a global economy heart attack, but instead, a cirrhosis process or something like is in the making. First, tariffs have not hit the economy quite yet because the anticipated imports in 1q lead to a slow down in 2q (which will show 2q GDP growth nearing 3%). It’s the 3q when we start seeing the real impact. Second, the real effective tariff market estimate of between 13-18%, is completely outdated after this new round of bullying. Looks like anywhere above 20% will be the next reference, enough to suscribe to the brave new world overhauling the tenets of globalisation. Think about a full trade war US-EU and we are done. That TACO acronym of which Trump is very aware of because he was asked in a press conference, is playing out the most pernicious effect in the whole process through the president’s psychology.

Just piling up effects to the day of reckoning.

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Alexander Fernandez's avatar

Markets acting chill while the tariff threats keep piling up is wild. Feels like we’re all just waiting to see if the trade wars actually hit hard or stay another “theatrical show.”

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