Good morning. Markets are wavering back and forth this morning as the selection of Kevin Hassett as the next Fed Chair suddenly appears uncertain and investors are left wondering if the secret to being selected is the promise to fight hard for a rate cut … no matter the consequences … a stance publicly adopted by some presently in the running. Tariffs … and the ramifications of trade agreements … and disagreements … are very much in the news today as the Wall Street Journal is reporting that the President is threatening to aim his favorite weapon – tariffs – toward any county opposing his desire to take over Greenland. It seems that tariffs are used for almost everything nowadays. Initially, they were imposed to control the export of drugs into the U.S., then they were put into place to get “fairer trade.” Now they are threatened to be used for so many other things including policy disagreements with the U.S. I sense, though, that people … and countries … are getting a case of “tariff fatigue” … and action taken by Canada and China could be a wake-up call. What action? Canada will soon be importing cars from China and hinted at further reduction in tariffs between the two countries … with the goal (my view) of trying to avoid the uncertainty surrounding U.S. constantly changing trade barriers. And this comes at a time when China’s trade surplus hit a record in 2025 … even in the face of the U.S. tariffs … and an agreement with Canada (and maybe others shortly) could cause this to surplus to further improve. It seems nothing the administration is doing at the moment is getting a lot of applause … and some of it might be unfair to a degree. A recession? Not even being presently discussed by economists as most financial firms call for continuing stock market advances this year … due, in large part, to ongoing purchases by the American consumer. The Agriculture Secretary took some lumps on social media by sharing information on what she considered an “affordable, healthy meal” for under $3 … and to many it seemed like a deaf approach to a population screaming for help. The problem? She is really not wrong … but a population where people do not want to be told what to eat … and how much to eat … certainly won’t listen. By the way … at that price, even the smallest of steaks is certainly out of reach.’ It seems the consumer is our economic wild hard but there is something quite interesting when looking at their views, feelings and actions … which is why it is so difficult to forecast the economy ahead. The American consumer is broke, confident, pessimistic and out shopping … sometimes all in the same afternoon. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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