Macro One-time tariffs are expected to be a transitory shock, similar to the supply chain disruptions experienced during the COVID pandemic. However, the pandemic taught us that supply shocks can have far more persistent effects than initially anticipated by economists, sometimes lasting years. The Federal Reserve is now cautiously assessing whether tariffs will generate such lasting disruptions. If not, and if the tariff-driven supply shock proves to be short-lived, much…

Macro Markets remained surprisingly calm despite significant geopolitical escalation over the weekend. Markets stayed calm after the U.S. struck Iranian nuclear facilities on June 22 and Iran retaliated with missiles targeting a U.S. base in Qatar on June 23, with neither action hitting energy infrastructure, prompting oil prices to drop over 7.2%, with Brent closing around $71.5 and WTI at $68.5 per barrel. Global equities edged higher while energy shares…

Macro This week, the U.S. House of Representatives narrowly passed Trump’s tax and spending proposal, which increases the debt ceiling by USD 4 trillion and is projected to add between USD 3.8 trillion and USD 4.7 trillion to the national debt over the next decade. There is no appetite to touch Medicare and Medicaid, and the most controversial items in the budget remain Trump’s old and new tax cuts. The…

Macro U.S. consumer confidence, based on data collected before the recent US-China trade negotiations, has dropped to the second-lowest level on record. Meanwhile, the University of Michigan’s survey shows the 1-year inflation outlook spiking to 7.3%—a level not seen since the 1980s. However, it’s worth noting that survey-based data has become increasingly volatile and less reliable in the post-pandemic era. Despite elevated yields in the 4–5% range, the U.S. economy…

Macro The FED held rates unchanged, in line with market expectations. What was unexpected was the lack of commitment to future cuts. The FED is ‘not in a hurry’ to cut but has warned about the growing risk of inflation and higher unemployment caused mostly by Trump’s tariffs. The FED failed to affirm any expectations, which means that it doesn’t know what is going to happen and does not attempt…

Equities On Wednesday (30/04), Q1 GDP came in at -0.3% QoQ vs. -0.2% expected, marking the worst reading since Q1 2022 (-1%). The decline was driven by a surge in pent-up imports ahead of Trump’s tariff policy. A rebound is expected in Q2 as imports normalise, but Q3 and Q4 may face distortions. Prediction markets (Polymarket) now assign a 65% recession probability this year. The Fed, however, still projects 1.7%…