A Rare Market Signal Is Flashing - And It’s Not Good

In 2025 we have had dollar weakness during a sharp sell-off in the stock market.  This is very rare. Is this unicorn going to stick around for a while?  What is the significance of this phenomenon?

I have delayed the release of this week’s write-up due to the extraordinary importance of Trump’s announcement today regarding global tariffs.  I can’t emphasize enough the potential long-term impact of “Liberation Day,” as we are witnessing in real time the largest economic experiment in history.   In prior reports, I have written at some length about the confusion and general lack of clarity we have experienced with Trump’s haphazard foreign trade policy, but the magnitude and import of his experiment is extending way beyond what I expected.  Yes, cynically, I have pointed out how much fun it has been trading the chaotic market conditions the Trump administration has created, but the impact of Trump’s policies will be broader and longer-lasting than I initially envisioned.  The U.S. economy may be the largest economy in the world, but it is only 27% of the global economy.  It doesn’t have unlimited power, and it is not in a position whereby it can dictate unilaterally trade policies without massive long-term repercussions.