Markets are struggling with just how much Trump’s tariffs might derail global trade and growth. In normal times the solution would be patient negotiation to avoid destructive trade wars. These are not normal times – we are dealing with America First MAGA zealots.

We live in interesting times. Markets are see-sawing on the strum et drang of events. It’s critical to cut through the noise, and figure where this all might be going. Once events are in motion, they become increasingly difficult to control. Change is in the air.

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.

The market is probably overstressing on Trump – but he does make a lot of noise. A bigger danger may be the broader signals and the future of the USA as economic hegemon. At a time when the US Debt clock is spinning so fast you can’t read the numbers, could the USA withstand a Dollar, Treasury and Political Competency Crisis? Let me explain by taking you to the top of a very steep mountain.

How sustainable is the Trump effect? The world is reeling from his demands and threats to trade. Trump’s power is to shock. Yet, we become inured to shocks, and work our way around them. How long before Trump’s backers and supporters realise that? And he hasn’t even started on China!

Trump has been the dominant influence on markets thus far in 2025. That won’t last forever as inevitable Trump fatigue will set in, and the consequences of his actions become clear. That’s likely to expose a very different mood – and one that may trigger a correction to reflect the new realities.

Yesterday is done and dusted. What counts is what happens next! Markets will move on from the election and return to pricing real events and their consequences. The first 100 days will be no honeymoon. Get set for “interesting” market moves, events and plenty of volatility.

 Trump’s inauguration will come and go. Lots of noise, 100 executive orders. No doubt we will be shocked. Then everything will settle and we will focus on the US/China Relationship and the US Treasury Market. The UK will be left wondering what, if anything, the “special relationship” now means.

As the clock ticks down to the US Coronation, markets are aligning for Donald Trump: a sustainable Treasury market, a strong dollar and Trump’s Treasury pick, Scott Bessent set to demonstrate competency at his senate hearing. What could possibly go wrong?