Watch credit for the bottom

Advertisement

Watch credit for the bottom. It will tell you when we are getting to the kind of economic accident that the Trump administration seems to want. Morgan Stanley.


This week’s tariff announcements were more hawkish than expectations and raise recession risks, unless met by negotiations in the very near term. We expect no cuts from the Fed this year as inflation firms, an under-appreciated risk for credit.

Softening growth with a lack of easing keeps the set-up challenging, similar to 2015/2018 (both periods saw spreads materially wider than current levels).

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:
Cancel at any time through our billing provider, Stripe
About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.