General Discussion

Yes, initially, I think you are right. Tariffs mean higher prices. But that leads to lower unit volume because wages are slow to catch up to inflation and fixed income folk have less choice. Lower unit volume means less labour is required. Plus retaliatory tariffs reduce exports and that means layoffs.

So after a bit, I think there will be a recession. And the stock market is two years into a bull, which is longer than median, I think. Three year bull markets are not unheard of but rare.

The Fed will lower interest rates to stimulate the economy, which will help the economy but will impress the stock market less than some expect. That's because there will be lower demand, fewer sales, etc. tRump will send out stimulus checks with his name on them, which will help the economy, but not help the deficit. This may be happening while Muck is busy pushing spending cuts. Spending cuts mean either less money going to people or government layoffs or a combination.

Labour markets will be full of turmoil if there are deportations at the same time as layoffs. Not many laid off maga will pick an immigrant's basket and pick strawberries. So there will be simultaneous labour shortages and unemployment.

I went to 85% bonds, 15% money market to try to preserve capital and anticipating the Fed will in a little while cut rates, perhaps after raising them a bit against inflation. I'm hoping there might be buying opportunities for stocks in 2026 or not long after, but I have no crystal ball, only seat of the pants reckoning.