Welcome back to Carson’s Take Five with Ryan Detrick, Chief Market Strategist at Carson Group, and Sonu Varghese, VP, Global Macro Strategist at Carson Group! This week, we break down the latest round of tariffs, their impact on inflation, corporate profits, and market volatility. While uncertainty looms, we explain why this isn’t necessarily a sign of recession or stagflation and what investors should focus on moving forward.
Key Takeaways:
- Tariffs Are Here: 25% tariffs have been imposed on all Mexican and Canadian goods (except for Canadian energy at 10%) and an additional 10% on Chinese goods, doubling previous rates.
- Tariffs & Inflation: While tariffs increase costs, their impact on inflation is uncertain—companies may absorb some costs instead of passing them to consumers.
- Profit Margins at Risk: With businesses potentially absorbing higher costs, corporate earnings could take a hit, adding to market uncertainty.
- Market Volatility is Normal: Stocks have faced turbulence, but history shows that post-election years often start with choppiness before strengthening later.
- Bonds Are Performing Well: As markets react to tariffs, bond yields have fallen, proving why diversification is key.
- Potential for Policy Shifts: While tariffs are a concern, tax cuts and Fed rate cuts later this year could help boost sentiment and economic growth.
- No Recession, No Stagflation: Oil prices are declining, and economic fundamentals remain strong, making a prolonged downturn unlikely.
What do you think about the new tariffs? Drop a comment below! Don’t forget to like, subscribe, and share for weekly market insights.
