Somewhere in the thick of the journey, a hero finds himself in what Joseph Campbell calls “the belly of the whale.” In this metaphorical dark place, our main character is forced to die the death of who he was before.
Getting swallowed by a whale can conjure up feelings of terror and uncertainty, but Campbell also reminds us that deep inside the belly is a sacred place of transformation. The hero wrestles with who he’ll be once he finally does emerge (and he always does).
Each day, we board a brand new roller-coaster of emotionally-charged headlines. Depending on where you look, Trump’s plan is either the apocalypse we’ve been building bunkers for or the beginning of a wildly positive, long-time-coming, global reset.
Our country didn’t become the most dominant player on the world stage by flying by the seat of our pants. The media may tell us that the current administration has no plan, but we may also be called to look deeper.
As we continue to encounter major economic uncertainty, we’re being forced to leave a comfy, familiar world and take a leap. We might not know who we’ll be on the other side just yet, but we do know we’ll never be the same.
Here, we touch on Trump’s tariff game, what a change of heart could do to the bond market, and why we can’t go back to America’s status quo.
(Re) Balancing Act
In Bessent’s recent commentary, he highlighted China’s push toward manufacturing is causing an imbalance with its trading partners. Currently, the nation exports its way out of economic troubles at home, which is simply unsustainable.
The game plan is to perform a rebalancing act and become the catalyst for change, not just in China, but stateside and worldwide. Ideally, China will begin moving its economy toward supporting domestic demand from within.
We watched Trump play tariff ping pong when he announced the original 145% will “come down substantially, but it sure won’t be zero”. Analysts are busy trying to make calls on that magic number with little clay to work with.
The game seems far from over. Some say the full China plan could take up to three years. Others say it’s all just the art of the deal.
How long it takes to settle up could be the difference between a slight economic slowdown and a full-blown recession. Businesses from Main Street to Wall Street want price certainty ASAP.
Bonding Time
Speaking of unsustainable, our country has an economy-sized, $36T debt hole to dig out of. Powell, Bessent, and the hedge fund giants all agree. Something needed to be done yesterday, however there’s no shortage of arguments over what that looks like.
When we look at today’s trading landscape, we see the same system that was put into place after World War II. The world has changed dramatically since then and now, we’ve gotta get with the times.
If Trump were to suddenly walk things back on tariffs and continue to foot the bill for Europe’s security, it could spell trouble for the bond market. Spending would continue on, flooding the market with even more debt.
More supply would be issued and people would buy it up. Prices would come down, yields would go up, and money from everywhere else would get funneled into the bond market funding vacuum.
Whether Trump’s radical policies and attempts at righting the ship are what we need for smooth sailing remains yet to be seen. One thing is for sure: there’s no turning back.
The whale that is roughly a century’s worth of wrong turns and bad decisions has finally swallowed us whole.
The Bumpy Road to Rebirth
In this dark, mysterious limbo space, America’s forced to confront its past and contemplate who it wants to be going forward. Uncertain times are always fuel for drastic change because they leave us with no other choice.
As we try to keep up with the headline whiplash, we may find ourselves wondering if we’re going about this the right way. The truth is we don’t yet know. We may get it wrong and we don’t yet know of those consequences.
But we may also get it right.
A hero isn’t born a hero. They earn that title through trials, tribulations, and coming to grips with the truth. On this journey, the good news is that we can always pivot and choose again, as long as we’re alive. Every aligned choice we make is a step closer to victory.
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Until next time,