Weekly Economic Report 4.24.26

In periods of great uncertainty, we spend less time worrying about what may happen across a plethora of scenarios, and more time concentrating on getting the current situation right. If one starts their analysis from the wrong spot, the chances of getting forecasts right obviously decline precipitously. So, as we step back from the trees to look at the forest, we believe the key driver of the big picture is unchanged – the US and China are engaged in a generational struggle for power and influence in the global economy that will not be decided anytime soon. The developments of the past twenty-five years have woven the two economies into a heavy interdependence, which cannot be quickly unwound. Indeed, it may be less difficult and disruptive to amend USMCA or NATO than to immediately end trade between the US and China – which would be likely in a direct conflict. Moreover, each side wants to maintain the parts of the intertwining that best serve their long run goals – so neither is in a hurry for a complete rupture any time soon. Oh, yeah – political leaders other than Trump and Xi are more noise than signal – as, unfortunately, are central banks right now.

EU04-24-2026.pdf

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