Insights

The Fed’s primary stated goal is to return inflation to 2%. It is failing, and with hindsight, the 100 basis points (bps) in rate cuts since September were a mistake. U.S. monetary conditions were never restrictive, despite Chair Powell’s repeated assertions. Rate cuts have only further stoked asset price inflation and provided additional stimulus to an already warm economy, putting a floor under inflation.

U.S. tariff policy, if implemented, threatens to upend the pro-growth investment climate. Even tariff proponents acknowledge that the application of tariffs could cause short-term pain.