Weekly Market Pulse: A Generational Change?

2025-04-28 09:11:00 ET

Summary

• Stocks have rebounded over the last three weeks from the initial shock of the “liberation day” tariffs announced on April 8th.
• If we are indeed entering a weak dollar period, it won’t be exactly like the one we had in the first part of this century, but it will likely be very similar.
• 10-year TIPS yields have been stable, so there hasn’t been a big change in the market based expectations for inflation and that means real growth expectations haven’t changed much either.

Stocks have rebounded over the last three weeks from the initial shock of the “liberation day” tariffs announced on April 8th. The S&P 500 is now down just 2.5% since the close on the day of the announcement (they were announced after the market close). There have been some changes to the initial tariff levels but even the reduced levels seem like a big change from the status quo ante. 10% tariffs on the entire world plus the “fentanyl” tariffs on Canada and Mexico (25% for non-USMCA compliant goods and 10% on energy and potash) plus whatever the latest level is for China (145% but not for some things) plus 25% tariffs on all imported cars plus whatever else I’ve missed, adds up to a pretty steep cost to the global economy. Or at least it would be if all these tariffs stayed in place for any length of time....

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