The fact the US is almost certain to be plunged into a unresolvable recession by the summer, doesn’t mean Trump will be pressured into recanting his economic heresies. Maga voters look likely to double down on him! Meaning an even deeper problems for US firms trying to retain the illusion of their current inflated valuations.

This week will be about Jay Powell – how will Trump deal with the resolute Fed chairman? Experience suggests badly. As the effects of tariffs on the US economy begin to bite, and the weakness of Trump’s negotiating positions become increasing clear.. fewer and fewer folk will be talking about buying-the-dip.

Global Trade is enormously complex. Trump has put 104% tariffs on China – which will directly impact US consumers. Shutting the door on global trade will inevitably trigger consequences. The biggest risk is to the bond market – and a stressed Treasury market when the US has $15 trillion to refinance in next 20 months is a really, really bad idea.

In times of financial stress, the market tends to take on a momentum all of its own. We may be in for further shocks, instabilities and dreadful No-See-Ums as investors try to discern what comes next following Trump’s tariffs. Interesting times to come…

US Treasury Secretary Scott Bessent has the most difficult job in the world. How do you explain to a cabinet of financial imbeciles the USA is on course for a stock market crash, recession, inflation and a possible collapse in the US Treasury Market? It’s high risk - Trump is a “shoot-the-messenger” kind of guy.

The yield on Sovereign Bonds is the “risk-free” rate from which relative risk in any economy is priced. There is a crisis across all developed nations in the quantum of debt they now face servicing in a global economy where risks are rising and there is a significant threat of stagflation. It’s time for nations to get aggressive about Liability Management of their outstanding debt.

Nothing beats teaching the next generation of financiers. I had that honour yesterday at Heriot-Watt’s Edinburgh Business School Yesterday where we discussed Markets, Politics and Economics. There were some great questions from my post-grad students – and one: “Is this a correction and should we buy the dip”, is good example of how much has really changed. The answer is – No.

Markets tend towards complacency – especially while there is lots of “stuff” going on… The current noise, much of it Trump generated, is hiding lessons and danger points! How long will markets keep up their positive vibe, blithely ignoring just how much the foundations of the global economy are shifting?

The City of London as the financial centre of global markets has been in terminal decline since 2008. Over-regulation and bureaucracy has doomed it. To restore the UK’s excellence and swashbuckling success in financial markets, we need to embrace risk – not regulate it out the equation.  

Yesterday’s UK’s 15-year Gilt deal was a 15 times oversubscribed blowout success, demonstrating global investors have confidence in the UK’s competence, stability and markets. However, Ray Dalio is writing another book about why countries go bust, and reckons the UK is caught in a debt-death spiral. I doubt it.