Markets Swing as U.S.-China Trade War Escalates
The economic data calendar was pretty quiet this week, but financial markets have been anything but stable. Equity markets plunged and the 10-year Treasury fell to its lowest rate in three years on Tuesday as trade tensions escalated.
At the end of last week, President Trump said the U.S. would move forward with a 10% tariff on the remaining $300 billion of imports from China. We do not think this is an idle threat.
While consumers would more directly be in the crossfire with this round, we still suspect the direct effects to be manageable. The indirect effects, however, could provide a further nudge to the Fed for more policy easing this year.
Read More: Wells Fargo economic Group 8-9-19