Recent economic indicators have dispelled the belief on Wall Street that the U.S. economy can remain strong despite President Trump's trade war. A notable stock market selloff followed poor jobs reports and downward revisions, raising recession concerns. Some economists had previously warned of overoptimism and red flags indicating downturns. James St. Aubin cautioned against excessive reliance on the idea of a "Kevlar economy" and noted risks like political pressure on the Federal Reserve. He pointed out that tariffs impact businesses unevenly, leading to varying exposure risk among companies.
The recent batch of indicators has punctured the notion on Wall Street that the U.S. economy is bulletproof and can withstand headwinds like President Donald Trump's trade war.
James St. Aubin, CIO of Ocean Park Asset Management, warned that investors were leaning too heavily on the narrative of economic resiliency.
Tariffs hit businesses unevenly, with some being far more exposed than others.
If you believe in resiliency too much, you're not being fully compensated for the risks you're taking.
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