Without adjustment on the home front, we believe that President Donald Trump's push to reduce the trade deficit is unlikely to improve the US trade balance, or boost domestic employment and growth. However, his outspoken approach and questioning of the prevailing trade system may be the very jolt that global trade negotiators need to update their thinking and move ahead with a constantly changing global economy and patterns of trade.
Will President Donald Trump be successful at reducing the US trade deficit through imposing tariffs? Can he boost US employment and growth this way? What is the best – and most likely – response of US trade partners to ad hoc US trade policy? And can something good come out of this? I'm discussing all this – and more – in the recent OMFIF podcast.
Given our longer-term views around the structural challenges facing the global economy, we struggle to see how inflation can rise meaningfully for any prolonged period of time. That said, while cyclical improvement does not override secular forces, a period of synchronised global growth is challenging the consensus narrative that inflation ‘volatility’ is dead.
Having worked as an equity strategist for well over a decade, I’ve lost count of the number of times I’ve had the debate on ‘what happens to equities when bond yields go up?’. And for most of that time bond yields were in the ice age and falling! To cut down on some future deja-vu, here's my Top 7 list of things to consider about equities when bond yields go up.