The financial markets began this morning with great calm, with a rebound in stocks, stability in bond yields, and oil regaining its footing.

These movements are based on a struggle between two main narratives, the first of which currently has the upper hand — namely:

The expectations of a less bumpy journey towards a fairer trading system where the United States receives concessions from its trading partners in a world of generally low tariffs, and the markets receive support from more flexible financial conditions as the Federal Reserve implements the four cuts currently signaled by traders.

On the contrary,

There are more difficulties ahead as protracted negotiations continue, with mutual tariffs dominating in the meantime, the Federal Reserve facing constraints due to high inflation rates, and the markets forced to reprice growth expectations outside the United States.

#economy #markets #tariffs #trade