Economist Craig Shapiro shared his insights on the unfolding U.S.-China trade dynamics, warning that while a tariff truce may calm immediate market fears, it could have unintended consequences for the broader economy.
What Happened: Shapiro, a macro strategist at Bear Traps Report, suggested that the so-called “tariff climb down” might prevent bond yields from falling, thereby maintaining pressure on an already strained economy as the Federal Reserve remains on the sidelines.
Shapiro’s analysis, posted on X, builds on his earlier reflections from May 9, where he drew parallels to the 2018 Donald Trump, Xi Jinping G20 summit in Argentina. Back then, a temporary trade truce sparked market euphoria, driving a brief rally as volatility subsided.
However, the optimism was short-lived. Markets tanked in the following weeks as the reality of implementing a deal set in, compounded by a slowing economy and a Federal Reserve that was tightening policy through quantitative tightening.
The situation only stabilized after the former Treasury Secretary Steven Mnuchin‘s emergency Christmas Eve call to major banks and Fed Chair Jerome Powell‘s subsequent policy pivot in early 2019.
Economist Craig Shapiro shared his insights on the unfolding U.S.-China trade dynamics, warning that while a tariff truce may calm immediate market fears, it could have unintended consequences for the broader economy.
What Happened: Shapiro, a macro strategist at Bear Traps Report, suggested that the so-called “tariff climb down” might prevent bond yields from falling, thereby maintaining pressure on an already strained economy as the Federal Reserve remains on the sidelines.
Shapiro’s analysis, posted on X, builds on his earlier reflections from May 9, where he drew parallels to the 2018 Donald Trump, Xi Jinping G20 summit in Argentina. Back then, a temporary trade truce sparked market euphoria, driving a brief rally as volatility subsided.
However, the optimism was short-lived. Markets tanked in the following weeks as the reality of implementing a deal set in, compounded by a slowing economy and a Federal Reserve that was tightening policy through quantitative tightening.
The situation only stabilized after the former Treasury Secretary Steven Mnuchin‘s emergency Christmas Eve call to major banks and Fed Chair Jerome Powell‘s subsequent policy pivot in early 2019.
Economist Craig Shapiro shared his insights on the unfolding U.S.-China trade dynamics, warning that while a tariff truce may calm immediate market fears, it could have unintended consequences for the broader economy.
What Happened: Shapiro, a macro strategist at Bear Traps Report, suggested that the so-called “tariff climb down” might prevent bond yields from falling, thereby maintaining pressure on an already strained economy as the Federal Reserve remains on the sidelines.
Shapiro’s analysis, posted on X, builds on his earlier reflections from May 9, where he drew parallels to the 2018 Donald Trump, Xi Jinping G20 summit in Argentina. Back then, a temporary trade truce sparked market euphoria, driving a brief rally as volatility subsided.
However, the optimism was short-lived. Markets tanked in the following weeks as the reality of implementing a deal set in, compounded by a slowing economy and a Federal Reserve that was tightening policy through quantitative tightening.
The situation only stabilized after the former Treasury Secretary Steven Mnuchin’s emergency Christmas Eve call to major banks and Fed Chair Jerome Powell’s subsequent policy pivot in early 2019.
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