It's real simple: the best we can hope for is no trade embargo. China is our military advisory AND our third largest trading partner. They want advanced chip technology and we want rare earths. Neither side can go forward without the other. Like most things in life, there is not a one shot solution but a slow and constant effort to keep the peace.
Outside of that I was asked about interest rates. Let me be clear on how I see it, and how I am playing it. I don't see the Fed cutting anytime this year. Inflation is not 2%, unemployment has not fallen off a cliff, and we still do not have clear trade policy. Period. Add to that, we never had highly restrictive monetary policy in the first place. The market will have to live on the hope of a new Fed Chairman being installed by the Trump White House next May - it's less than a year away. And really, what would a 0.25% cut this year do? Not much. The market will live either way.
What is my big takeaway from the interview today? People are all bulled up on optimism due to strong earnings, the promise of higher productivity from AI, and nobody can see a problem on the horizon. Expect the markets to keep ripping higher until reality settles in when America gets a 15% across the board tax on imports. Will moderated growth cause valuations to drop on Mega Tech as smaller firms see renewed interest? Time will tell.