Confused? In today’s constantly changing economic landscape, it’s hard not to be.
Last week around this time, financial markets were beginning to look ugly. They kinda still do, BTW. But then things began to get crazy with the smack down in the White House last Friday. President Zelensky (Ukraine) vs the tag team of President Trump and VP J.D. Vance had a television moment for the ages. A truly crazy exchange never seen before. War? Peace deal? Meh.
With the dreaded (?) tariffs set to go into effect at any time, the fear of inflation raising its ugly head is rippling through the financial markets. Talk of recession is now a dinner time conversation (no eggs on the menu). Interest rates are coming down (no inflation fear there) and the stock markets are really taking notice. The road to the Golden Age of America is filled with very ugly potholes.
Now, crazy as it seems, the new administration is expected to get egg prices down after only a month or so in office. Bird flu is apolitical, BTW. What, chicks don’t grow into chickens and lay eggs in just a week or so? Who knew. It’s also crazy to have expectations that doing a complete “remodeling” job on the U.S. government would be smooth and easy. Disruptions abound (crazy BIG disruptions), with even more to likely come.
There is now talk (from the Atlanta Fed) that the first quarter GDP may actually come in negative. By a lot. Seemingly bad news? Well, yes for investors. Remember, a newly elected president wants (welcomes?) all the bad news out ASAP. Market crash 50%? Have it happen now. Recession? Have it happen now. Job cuts? Have it happen now. Why?
Well, if the market crashes, it’s a HUGE buying opportunity. If there is a recession, interest rates will come down, inflation will certainly moderate and housing will become more affordable. Job cuts will, of course, be a negative. BUT THEN, after say six months, growth and recovery begins. Sprouting anew. The new president gets credit for all the good recovery news and the public, as always, will have forgotten the bad times. That usually takes about a year.
So, it’s gonna get ugly. It’s gonna get crazy. And then, MEH. What’s the big deal?
