Counterfactuals And Revisionist History

2025-06-27 11:50:00 ET

Here are some things I think I am thinking about.

1) Tariff counterfactuals

The stock market has returned to where it was before the whole tariff fiasco happened. And now I am seeing people say, “See, the tariff worries were all overblown!” The endgame here played out more or less the way I said it would back when I pegged 70% odds of “Scenario 2” in my April 19th note . Trump mostly caved on China and the effective tariff rate has now dropped to a rate that is still high, but nothing remotely close to the embargo-style levels we had in mid-April. And the markets have rightly bounced back. But that doesn’t mean there was no damage done....

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