Playbook Summary:

• Headline risk is especially acute during periods of uncertainty.

• Some countries, like Germany, are more vulnerable to trade wars than others.

• Broad-based tariffs create more economic inefficiencies than specific tariffs on emerging industries.

• Trade uncertainty could delay capital spending, as was the case in the months preceding the election.

• The fluidity of exceptions makes it difficult to forecast inflation, creating volatility in fixed income markets.

The Man Who Moves Markets

Apparently, President Trump is a man who can move markets, both to t

It was quite the week in the Treasury market last week, which was influenced by multiple factors: sticky inflation expectations, the Federal Reserve's (Fed) patient stance, rumors of foreign buyer boycotts, hedge fund deleveraging, portfolio rebalancing from bonds to cash, and overall Treasury market illiquidity. The situation was exacerbated by a notably weak 3-year Treasury auction, where the Treasury Department had to offer higher yields to attract demand — which still fell short of expectations. At its peak, the 10-year Treasury yield surged by over 0.70% last week before partially recovering to end the week "only" 0.6

The sharp declines in U.S. equity indexes over the past week were unsettling, but far from unprecedented. Historically, similar sell-offs have occurred at least 14 other times in the past century under strict definitions of what constitutes a "waterfall decline" — and many more times under a broader criterion. Market shocks tend to trigger aggressive risk repricing, and last week’s tariff announcement was a prime example. Few expected the sheer magnitude of the tariffs announced, making them a true shock to the system. Initially, markets responded quite rationally, trimming exposure to risk in an orderly fashion. However

After last week’s eyebrow-raising selloff and a roller coaster session on Monday, U.S. equities attempted to claw back a portion of their recent losses yesterday. Markets initially cheered potential trade deals that could be around the corner for Japan and South Korea, also noting headlines suggesting the Trump administration may be willing to admit that negotiating could be necessary. However, another bout of volatility halted Wall Street’s advance after a White House official stated the U.S. will proceed with levies on China as high as 104% (they went into effect at midnight last night). Tuesday’s choppy session ended with