#TariffsPause

In all the noise and rapid market moves of the past week, it is worth going back to where we were before President Trump’s Liberation Day announcements. 

Even before that development, our macro team had been steadily reducing their expectations for growth in the United States. The economy is clearly late cycle, and won’t expand at a constant rate of 3 per cent forever. And the threat of even minimal tariffs, as the administration has long telegraphed, promised to be inflationary. Therefore, the odds of a stagflationary outcome were already rising before 3 April.