Julian Jessop

2 weeks ago | substack.com | Julian Jessop

This is the first time I have ever had to post twice in one day on the same topic, but here goes... President Trump has just raised tariffs on China to 125%. However, he has also announced a 90-day pause on the 'reciprocal tariffs' for those countries that have not yet retaliated. Thanks for reading! Subscribe for free to receive new posts and support my work. On balance this is clearly good news, and markets have reacted accordingly.

2 weeks ago | substack.com | Julian Jessop

A week on from ‘Liberation Day’, Trump’s tariffs have not landed well in the financial markets, especially with a tit-for-tat trade war now breaking out between the US and China. That much is obvious. But there is still a lot to unpick. The simplest place to start is the stock markets. The US S&P 500 had lost 12% of its value in just four days by the close on Tuesday, driven mainly by worries about the impact of a trade war on the US and global economy.

2 weeks ago | telegraph.co.uk | Julian Jessop

The fall in energy prices will be too little and too late to prevent headline inflation from jumping in April, perhaps to as high as 3.5pc. (It was 2.8pc in the latest data, for February.) But inflation is now more likely to peak at a lower level than either the Bank or the OBR had been expecting, and to fall more quickly thereafter. This alone may not be enough to justify cutting interest rates more aggressively.

2 weeks ago | substack.com | Julian Jessop

President Trump’s tariff war has already had a large number of consequences – intended or otherwise – for the global economy. But the slump in energy prices is at least one result that we can welcome. On Monday the price of a barrel of Brent fell to US$64, down about 16pc from the average of US$76 in the first three months of the year. Thanks for reading! Subscribe for free to receive new posts and support my work. Natural gas futures prices have weakened even further.

2 weeks ago | substack.com | Julian Jessop

By popular demand, here is a bitesize Q&A on tariffs. 1. Do the new ‘reciprocal tariffs’ make any sense? Thanks for reading! Subscribe for free to receive new posts and support my work. No. They ignore services, assume any deficit in goods between two countries means that the surplus country must be cheating, and rely on dodgy assumptions about the pass through of tariffs and the price elasticity of demand.