Stock Vigilantes May Push Back If Trump Escalates Tariffs Says Tom Essaye
Sevens Report warns equity markets won’t tolerate unchecked trade risks
‘Stock vigilantes’ could rebel against Trump’s tariffs: Sevens Report
WALL STREET MAY SOON SEND A MESSAGE IF TARIFF THREATS TURN TO ACTION
So far, investors have largely shrugged off Trump’s tariff rhetoric, assuming he won’t follow through on aggressive trade threats.
But according to Tom Essaye, founder of Sevens Report Research, that complacency may soon fade if tariffs actually hit.
“It’s possible that stock vigilantes could appear… If Trump views the new highs in stocks as a ‘green light’ to escalate the trade war, it may well have to decline to remind the administration…”
Essaye argues that the U.S. economy can absorb around 10% aggregate tariffs, but anything more could threaten a return to stagflation-like conditions.
The term “stock vigilantes” borrows from “bond vigilantes”—investors who sell U.S. debt in protest of fiscal mismanagement. This time, equities could become the market’s way of saying “enough.”
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