… neither does anyone else. However, we certainly recall the panic p0rn that the Protection Racket Media ramped up on ‘Liberation Day,’ and for a couple of weeks afterward. When the markets dipped the first couple of days, the media rushed to predict not just utter ruin for investors, but also runaway inflation, goods shortages, and all the worst parts of the Bible put together.
Three months later, the Wall Street Journal looks back on The Devastation That Wasn’t:
A historic and tumultuous quarter is wrapping up with U.S. stocks at records and many investors betting the ride isn’t over yet.
The April swoon that carried the S&P 500 to the brink of a bear market has been erased and then some. The broad index has now added more than 8% since President Trump announced sweeping tariffs that sparked havoc in markets.
Now, investors have more reasons to feel upbeat. Both the S&P 500 and Nasdaq Composite Index hit fresh all-time highs on Friday. Robust corporate earnings and solid economic data suggest that growth remains resilient. Inflation is trending near the Federal Reserve’s 2% target. Banks that slashed their year-end targets for the S&P 500, such as JPMorgan Chase and Goldman Sachs, are raising them again.
It’s not just the S&P 500, either. The Dow Jones Industrial Average (DJIA) has not quite returned to its February peak, but as this chart shows, it’s well above the pre-Liberation Day level, and has a net gain from when Donald Trump took office:
At the start of the year, the DJIA average was at 42,397.27. On April 2, ‘Liberation Day,’ it was at 42225.32. Today’s DJIA at 2:10 pm ET was 43953.75, which is 3.6% above the beginning of the year, and 4.1% above the Liberation Day close. The NASDAQ has performed even more robustly, tracking at a year-long high at 20,296.18, up 5.2% YTD and 15.3% since its Liberation Day close.
What about all of the runaway inflation from Trump’s tariffs? Count that also as a hyperbolic fantasy. The Consumer Price Index (CPI) monthly increases during the Trump months have all come at or below Joe Biden’s final six months. The annualized CPI/Core CPI rates have been flat for the last three months, and well below the levels seen in the last months of the Biden Regency. The Fed’s favorite inflation indicator, the PCE Index, has similarly remained flat. And needless to say, no one’s seeing mass shortages in the stores, of dolls or anything else either.
Some will claim that this is because most of the tariffs have not yet been applied. Trump has postponed their start to allow for negotiations with trading partners, which means much of their predicted impact remains as potential rather than actual. That’s certainly true to some extent, but Trump did apply tariffs to China, which was supposed to cause much of the supposed devastation, as well as to other partners. Trump and Xi Jinping are still tweaking those rates and restrictions, but it hasn’t had any broad impact on the American economy.
Besides, the markets tend to calculate on a futures basis. Investors got spooked for a day or two, but then recovered their wits and began making deals again. Americans didn’t panic either, despite the panic being sold to them by American media outlets. That’s not to say that voters are fully behind tariffs as a permanent feature of international trade, but they certainly didn’t elect Trump to maintain the status quo on trade, either. They are willing to give Trump some room for renegotiation in order to correct abuses by trading partners, especially regarding China and perhaps Canada too.
Maybe this will cause some economic erosion if Trump can’t nail down trade agreements by his July 9 deadline, which is probably still a flexible goal than a hard-and-fast redline. But it hasn’t done so yet, and the only people fretting over it likely work in newsrooms — or better yet, narrative labs.
