If tariffs will strengthen the economy while everyone else predicts disaster, you've discovered market insight worth billions. The Dow didn't just drop 2,200 points because investors are confused, it dropped because people with serious money and expertise believe these tariffs will damage the economy. If you're right and they're wrong, there's an obvious move: bet against them and get rich.
p.s. Trump did this before in 2018-2019, giving us some hard data about the economic effects of tariffs on modern america that are guiding the economic consensus.
In the long-term. Hence "innoculation"--a prick today to prevent a serious illness tomorrow.
In the grand scheme of things, the market movement we saw in response to these tariffs is dwarfed by the sustained market downturn throughout much of 2022. Fueled by persistent inflation concerns and the FED's aggressive interest rate hikes, the S&P 500 index shed approximately 25% from its peak in January 2022 to its low in October 2022, a far more significant and prolonged decline than a single day's reaction to tariff news.
We recovered from those. We will recover from the short-term effects of these tariffs as our economy begins to price in the risk of external dependency.
This must be one of those multi stage inoculations where the prick keeps coming back.