A Little Disturbance.

Providing poetry.

“It’s the first thing I read every morning.” — David Barboza, founder of WireScreen and former Shanghai Bureau Chief for The New York Times.

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1. President Trump took the lectern Tuesday for his primetime address beset by warning signs about the US economy, and acknowledged to Americans there could be more discomfort ahead. Trump defended his plan to remake the world’s largest economy through the biggest tariff increases in a century, saying it would raise “trillions and trillions” in revenue and rebalance trading relationships he called unfair. He cast the economic pain the levies are expected to cause in the form of higher prices as a “little disturbance” the nation ought to be able to overcome. “Tariffs are about making America rich again and making America great again. And it’s happening, and it will happen rather quickly. There’ll be a little disturbance, but we’re OK with that. It won’t be much.” For large swaths of his record-setting 100-minute joint address to Congress on Tuesday night, though, Trump preferred to spend time on issues he sees as his political strengths. He hammered topics like transgender rights, migrant crime and diversity, equity and inclusion, and said relatively little about consumer prices. The president proclaimed he was leading a “common-sense revolution,” saying “our country will be woke no longer.” (Source: bloomberg.com)

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2. John Authers:

(T)wo concepts are in question. The first is the “Trump Put.” Until now, it has been taken as axiomatic that the president cares too much about the stock market to persist in a policy that causes a selloff. Any climbdown, as (Commerce Secretary) Lutnick appears to be signaling, will be taken to show that the Put remains in place, and the stock market does retain its veto over economic policy. The fact that these tariffs have actually been imposed, however, has radically challenged that belief.

Second is the notion of the US as a safe haven. The well-established principle is that in times of trouble, the dollar goes up. This is true even if the source of the trouble is the US itself; in 2011, money poured into the dollar as a haven even after Standard & Poor’s downgraded US sovereign credit. A big dollar fall therefore suggests that traders are at least cautiously considering whether the US can serve that function any longer. Policymaking this erratic doesn’t make for the safest of havens.

The biggest question for the next 24 hours is whether the tariffs stay in force. If they do, then the Trump Put is no longer operative. That would spell the end of another cozy assumption and leave markets on their own. (Sources: bloomberg.com, foxbusiness.com)

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3. Robert Armstrong, Financial Times:

Markets are volatile and uneasy, and it is easy to attribute this to the US tariffs just imposed on Canada, Mexico, and China. But what we are seeing in markets is more consistent with a general growth scare than a tariff-specific sell-off. And this makes sense: the tariffs were an unpleasant surprise that followed and added to, rather than caused, a bundle of bad signals from the economy and markets.

The growth and tariff effects are not mutually exclusive. Tariffs, in the short term, are growth negative. But right now there is much more going on than that.