Historic Tariff Conflict Ignites Economic and Market Disruption
- The Trump administration was widely expected to pursue protectionist policies, ending decades marked by expanding free trade. The breadth and magnitude of the tariffs announced by the new administration has been much more aggressive than anticipated.
- U.S. equity markets have weakened over the past several weeks. Interest rates have been volatile while spreads on riskier credit-sensitive bonds have increased, reflecting renewed fears of an economic slowdown or even recession.
- Economic uncertainty and the impact of tariffs on corporate profit margins will likely slow economic growth and upend global trading patterns.
- Fundamental investment concepts such as diversification, rebalancing across portfolio components, and tax loss harvesting to reduce the tax drag on taxable assets remain the best ways to benefit from market volatility.