Weekly Market Pulse: Tariffs Aren't The Answer

2025-01-21 14:12:00 ET

Summary

• Economic growth can be reduced to just two elements – workforce growth and productivity growth.
• The dollar’s reaction to Trump’s election makes clear why tariffs are the wrong remedy.
• The re-election of President Trump and the Republican sweep means politics will have a bigger impact than usual, and I will have to pay more attention to it than I normally do.
• Interest rates fell across the board last week as the inflation figures, for some reason, were interpreted as benign.

For every complex problem there is an answer that is clear, simple, and wrong.

H.L. Mencken

By the time you read this, we’ll have a new President. Well, actually, he’s an old President, but whatever we think we know about him from his first term may not be much help in the second. The group of people about to take over in Washington, D.C. is a lot different than in his first term. About all I can promise for the next four years is a permanent sort of uncertainty. Whatever you believe about Donald Trump, no one can say they know what he’s going to say or do next....

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