Up, down, shake it all about. Current markets are driven by short-term rumour and sigh about what Trump might do or say next on tariffs. However, the real threats are longer-term – how the global economy is increasingly vulnerable not just to trade and economics, but also the growing weakness and unravelling of US military might. The implications for global security could change everything.

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.

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.

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.

When future economic historians try to figure out the pivotal moment in the Decline and Fail of the American Century, its likely last week will figure in their thinking. Trump’s actions will have profound implications for bond and tech markets – and the time to start building these consequences into portfolios is NOW!

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.

It’s clear 2025 will be a challenging year – there are plenty of issues to cause markets headaches, but opportunities in abundance. The primary problems may come from the ongoing politics of disruption and the likelihood electorates are going to remain profoundly disappointed.