This isn’t Trump first term when it comes to imposing tariffs, and it is clear to the observers that the process and results are determined by his team not himself.
From Trump’s previous tariffs threats, we have seen that his teams are aware of the market risks and is deliberate when it comes to handling that with delays and taking more time to look into it.
Right now the consumers, for whom are irrational, reacts to Trump -> causing a decline in consumer confidence -> triggers the market’s perspective-> hence creating irrational fears.
The market was wise for a moment when it chooses not to overreact to Trump’s tariffs threats. However, that is not the case for consumers. The knee jerk reaction from consumers affected the datapoint in near-term, making traders overreact too in a chain of reactions.
Clearly, given that no tariffs are in placed right now, traders are focusing too much on a single data point forgotten that there is no direct causal link between both, but rather an emotional one. So if there is any implied negativities, it isn’t cause by tariffs because we don’t have any right now.
The market is overreacting on emotional impact of tariffs not the actual impact of tariffs. This blows things out of proportions.
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