Issue 28: Bets On

15 May 2025

The large reciprocal tariff rate cuts agreed by US and China in Geneva last weekend maybe set for 90-days but the global trade tariff war is effectively over. There is intent on both sides to reach a trade agreement, and this US-China de-escalation means other countries will follow suit. It won’t be smooth sailing. But greater certainty for businesses and consumer make for a better second half. A global recession is off the cards and so is an inflation resurgence, not that Trading Post ever subscribed to either. If mainstream economists continue to raise alarms, it reflects a fundamental misunderstanding of how inflation works and what drives it. Current trends in broad money growth, credit cycles and monetary policy settings simply don’t support the prevailing inflation narrative.