The financial markets opened 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:

Expectations of a less rocky journey towards a fairer trading system in which the United States gains concessions from its trading partners in a world of generally low tariffs, and the markets receiving help from more flexible financial conditions as the Federal Reserve implements the four cuts currently indicated by traders.

On the other hand,

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

#economy #markets #tariffs #trade