Report
Paradoxically, could Donald Trump’s tariffs eventually drive equity markets higher?
Equity investors believe that Donald Trump’s tariffs are leading to a decline in global trade and global growth, and therefore driv ing down share prices. But there is another mechanism that works in the opposite direction. Trump’s tariffs are leading to a more expansionary monetary policy in the United States, both because the dollar is appreciating and because the Federal Reserve is worried about a growth slowdown. The more expansionary monetary policy and the tariffs in the United States are as a reaction lead ing to a more expansionary monetary policy in other countries (Europe, China, emerging countries). The result is therefore a more expansionary global monetary policy , which is positive for equities.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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