Trump blinked. 42 days after “Liberation Day” China gets a 10% base tariff level, putting it on better trade terms than the EU?  It was a ramble of conflicting narratives, but the reality is the US may just have averted a catastrophic trade induced crash – it will likely still experience a stagflationary shock.

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.

Scott Bessent shocked the World Bank gathering this week with his rambling demands for fealty to an American led financial system. But what was really asking for? A time machine to take America back to the 1950s?

The narrative in US markets grows more improbable every day. Did Trump not threaten to sack Powell last week? And aren’t massive tariffs on China a guarantee of US victory? Apparently, that was just a dream sequence, and Bobby Ewing is about to step out the shower. Confused? You will be. Welcome to Trump – The Soap.

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.

Content with his supposed win in the Tariff Wars, now Trump is rooting out internal dissent – Harvard being top of his list of target institutions. What next? US Risks are rising and are still not fully reflected in stock or bond prices. Peak Trump is a long way down the road – till then things may get worse.

The irresistible force of Trump has hit the immovable rock of Economic and Market Reality. The inconsistencies of Trump’s tariff policies - the centre-plank of his economic understanding - have been exposed as bogus. It begs the question – What Next? Which is why markets are braced for even more dislocation.

Trump’s supporters think he just played a blinder of masterstroke reversing tariffs. Those of us with clearer minds and an understanding of finance know the truth – Trump lost. The bond market punched him hard between the eyes.

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…