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Not Priced In [1]
['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']
Date: 2025-01-31
The current occupant of the White House is so inconsistent and chaotic that markets can't efficiently price in the cost of expected actions.
Politico has an article about the anticipated effects to consumers of a 25% across the board tariff levied against our two largest trading partners, Canada and Mexico. Politico Article on Tartiffs. Suffice it to say the average consumer would pay $2.600 more per year for a basket of consumer goods if these tariffs are implemented.
Such steep cost increases would obviously seriously slow down sales of consumer goods, especially discretionary purchases (like a new car if you already have one).
However, the S&P 500 (absent Deep Seek fears), is humming along like we are about to blast into the biggest bull market ever. The denialism on the imposition of tariffs is so great even the political betting site "Polymarkets" sets the chance of tariffs being declared by Jan 31 at only 10%.
Personally, I hope a last minute deal with our two largest trading partners is reached, but given that tariffs were a signature part of the current administrations "platform" or talking points, I fear 25% tariffs are coming on Saturday.
The cost to the economy is not priced in.
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