Highlights

• Bob Hoye of Institutional Advisors returns with his latest market insights. The new trade tariffs.
• Tariffs on Canadian lumber this January pushed the mean new home price higher by over 10% as a direct result.
• Although the current economic system is far from flawless, solid monetary policy has solidified the global economy in the wake of the Great Recession.
• Low rates stimulated corporate expansion / output while stabilizing the financial institutions.
• Although economic slowdowns are painful, the process tends to redistribute useful resources from less to more-productive enterprises / sectors.
• New technologies lead to key innovation, greater productivity and a highly efficient business environment.
• Now that the economic vessel is no longer taking on water, policymakers are reversing the process, lowering rates, decreasing QE operations.
• Three key economic threats are facing the global economy, Quantitative Tightening (QT), higher real rates, and a global trade war.
• Economic history shows that tariffs rarely bode well in the long-term for countries that adopt the sanctions.
• Fiscal policy tends to attract rent-seeking behavior, line the pockets of political allies and do little to improve overall economic welfare.
• The tariff dilemma creates a new inflation wild card for global monetary policy, as taxes are intrinsically inflationary, resulting in higher prices across multiple economic segments.