May 21, 2019
So, we had declared that everything was in place for a fantastic economic ride. Low interest rates, a moderately expanding economy and rising stock prices. Then the ugly word was uttered — tariffs. It took one word to put a bump in the road of our goldilocks economy. As soon as the word was spoken (or Tweeted) — the markets immediately showed their dismay.
Now, this word had been bandied about before as part of the many trade discussions which have taken place in the past few years. Sometimes the word just turns out just to be part of negotiating tactics. Or, the tariffs implemented are not as extensive as threatened. In these cases, the markets have quieted down, and the economy has moved along its merry way. It has been about two weeks since the word was presented recently, and in this case the drama has continued.
However, the initial reaction we have witnessed reminds us that it only takes one little — or big — thing or event to upset the apple cart. Natural disasters, political events, international tensions, and more, have the ability to put a charge into the economy and the markets. Thus, the word tariff can be very ugly, or it can just be a gentle reminder. Only time will tell.
Source: Origination Pro