Morgan Stanley In Bear Suits
The markets are awash with tariff talk, and now one of the biggest investment banks in America has raised its voice. According to Morgan Stanley, our quarters are numbered. They suggest the global economy could be in recession territory by year-end if we can’t find any firmer footing around trade.
According to the bank’s chief economist, Chetan Ahya, tariff threats are getting in the way of business decisions to either reinvest profits or hand them out as dividends. 25%-high tariff walls could end any hope of reinvesting profits at good rates. That’s why the bank fears companies will reinvest less, slowing their growth, and apparently hurting the wider economy to the tune of a Christmas recession.
President Trump better hope not. He’s got to keep the US economy in one piece between now and his electoral bid next year. Whether he can do that whilst getting what he wants out of the trade war, is making for interesting viewing. Morgan Stanley’s announcement makes them the latest to weigh in on the drama and how it might end.
Over the weekend, China added fuel to the fire by accusing the US of breaking a tariff promise. No doubt, the White House will push back. With no signs of tensions cooling, we’re in for an interesting month ahead as both countries get closer and closer to making a concession. Who’ll buckle first? We’ll keep a tab on it for you, invstrs.
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