Is This Time Different?: America's Tariff Strategy and the Spectre of Recession

Fitful swings in equity and bond markets this past week have wrecked more sleepful nights than drunk neighbors on Independence Day.  What can be done? The NASDAQ hourly chart resembles an EKG reading of a fibrillating heartbeat.  Some fear this could be the heartbeat of the new American economy. 

Treasury Scott Bessent has been making the rounds on numerous media outlets with defibrillator pads at the ready.  Perhaps the cold plunge into the tariff pool may have been too much for prediabetic markets accustomed to a diet of loose fiscal policy.  Financial stimulus is as addicting as sugar, so say the economists.  

Though positive outcomes could arise out of the tariff negotiations, there are too many hands in the till that benefit from the status quo.  Change is unwelcome when large sums of money are involved.   

Even the benchmark 10-year Treasury has come under attack with yields increasing by approximately 50 basis points.  Strange for the sudden shift in risk-off sentiment.  

Almost as if a sovereign bond holder were dumping T-Bonds to apply strategic pressure on Washington D.C.  But that is just silly speculation.  Something is different about this selloff, but the principles of investing remain.   

Equity markets often temporarily decouple from their long-term fundamental purpose, which is to value the progress of human innovation, growth and trade.  We can see equity markets plunge regularly by -10% or more.  In fact, this happens most years.  

Bear markets occur every 5 years, on average.  And yet, a recovery has never failed to materialize.  

What happens next is not without precedent.  We believe it will be no different, despite cries to the contrary.  Remember, hyperbole is usually wrong and this is why we call it hyperbole.  The news demands your attention and will go to great lengths to get it. 

Balance out your newsfeed with Ben and Brent as they dive further into this topic.  They discuss tariffs, recession worries, history of America’s major bear markets, and what to expect next.  

 

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About Your Hosts 

 

Ben Jones 

Managing Director, National Wealth Management Group 

www.nwmgadvisors.com  

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Brent Gargano, CFPⓇ 

Founder & Advisor, Infinite Wealth Planning  

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Editor

 

Trevor Gargano

Email: [e-mail]

Linkedin: https://www.linkedin.com/in/trevor-gargano-72727b67/

Website: TheDigitalQuarterback.com

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