No Summer Slowdown for Markets – Yet

Michael Zezas, Global Head of Fixed Income Research and Public Policy Strategy, discusses the lack of a summer slowdown in U.S. policy catalysts affecting financial markets. Despite recent policy events including speculation about Fed leadership, details of the new fiscal bill's deficit impact, and announcements of new tariffs, major financial markets show little reaction. Zezas explores two potential explanations: a delayed impact of tariffs due to companies using existing inventory, and the possibility that the full impact of tariff increases isn't yet reflected, as details and exceptions in negotiations with major trading partners remain unclear. He concludes that market movements suggest investors are assuming benign outcomes, but that trade policy details and economic data in the coming months will be crucial in testing this assumption.