The turmoil over the announced United States tariffs on over 75 countries worldwide has sent the markets into a whirlwind. We have seen the Stock Market and Bond Markets both with a Jekyll and Hyde response. First the Stock Market is up, then it is down, then up and then down. The Bond Market has reacted the same. Yields are up, then yields are down, then yields are up again. The Stock Market and Bond Market do not like uncertainty. Are we entering Trade War? How will other countries respond? How will China respond? Will they increase their current tariffs on U.S. imports? Are the tariffs inflationary? Will the tariffs push a worldwide recession? Will we enter a period of “stagflation” similar to the late seventies? This uncertainty created the combined market volatility. This volatility has spooked investors and homebuyers alike. Before we panic, we need to remember that tariffs on U.S products creating significant trade imbalances are in place in all of these countries. The U.S. tariffs are “reciprocal” in nature, meaning the United States has placed tariffs on these countries similar to the tariffs on U.S. goods. This is an effort to “balance” trade. This will create uncertainty as countries come to the negotiating table with the U.S. This will eventually settle the markets. If you have money in the Stock Market, do not panic. If you are looking to buy your new home, this is still a great time to buy! Do not let the tariff noise create turmoil in your own finances.
