Jon Sindreu

What investors are realizing today is that the growth prospects of the U.S. are deteriorating.

One reason could be that the dollar was very expensive already, but that still doesn't explain why the drop was so obvious. And also, the dollar has been dropping most of the past month and a half, ever since Trump basically announced those big tariffs on Canada and Mexico. What investors are realizing today is that the growth prospects of the U.S. are deteriorating.

And it turns out that even though they might be right that a tariff does mechanically push up the dollar, actually the growth part of it is far more important.

The vision that the dollar should go up has been around for quite a while. It kind of worked in the first Trump term when he put his first tariffs on China. But this time we knew the tariffs would be larger. Analysts were saying during the campaign, yeah, yeah, the tariffs will be dollar positive.

And of course, this joins other policies that are attached to Trump, which are also supposed to be dollar positive, like cutting taxes and maybe interest rates will go up because of Trump. And that also means there's more money to be made in the U.S. and people move more money there. But what they forgot is, yeah, that's fine. And sometimes it works.

But the long term outlook on whether equity investors will make money here the next 15 years as they have this past 15 years rather than investing in other parts of the world, that's actually huge. So that's what the stock market is pricing in today.

It's saying that this as a growth strategy is not a good one. This is not a growth strategy that reminds us of the cases where protectionism has had some success. And when we look at the U.S. economy, we don't see a coherent way to perhaps

achieve the goals that the administration says that they want, such as bringing back manufacturing jobs and increasing productivity growth in what they've announced. So investors don't believe that this will lead to higher productivity growth, and they have good reason to not believe it.

Thank you.