Bank of America analysts suggest that Monday’s market rally, sparked by news of a U.S.-China tariff agreement, may reflect the so-called “Trump put” — the notion that Trump will act to limit stock market declines.
- “The recent news flow on trade suggests that de-escalation is likely to continue.”
- “The Trump put is alive and well.”
- “The administration is incentivised to avoid a recession, and more trade deals are likely forthcoming.”
The analysts go on to day that despite recent deals with China and the U.K., the 10% baseline tariff introduced on April 2 is “likely here to stay.” That view was echoed by Commerce Secretary Howard Lutnick, who said Sunday that the baseline tariff is expected “to be in place for the foreseeable future.”
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Markets are very forgiving. They’ll punish you for stuffing things up, but if you move to fix it, all is forgiven! Tariffs are still the highest since WW2 so there is still some work to be done.
This article was written by Eamonn Sheridan at www.forexlive.com.
