President Trump's recent tariff policies have triggered a dramatic 10.5% decline in the stock market, indicating investor panic and disappointment. Analysts attribute the market's reaction to the unexpected magnitude of the tariffs, which surpassed investor expectations. China's immediate retaliatory tariffs further complicated matters and demonstrated that international trade partners were not complying with Trump's demands. Federal Reserve Chairman Jerome Powell's acknowledgment of potentially higher inflation and slower economic growth adds to the alarm. The business community's initial support of Trump now faces growing criticism, with concerns about the potential long-term damage to the economy and American businesses.
In the past, the one constituency President Trump has sometimes listened to has been our stock market. Well, it has spoken, falling 10.5 percent in one of the largest two-day stock market swoons in decades.
In the 50 years I have been immersed in markets and economic policy, I have never before witnessed a signature economic policy initiative that was met with such unalloyed criticism.
Given the higher-than-predicted tariffs, higher inflation and slower growth were likely to ensue, according to Federal Reserve chairman, Jerome Powell.
The business community, which by my count heavily supported Mr. Trump in the election five months ago, seems stunned.
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