Powell’s Surreal Showdown—Who Will Blink First? 🤯

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What to know:

  • Traders clamoring for Fed magic might end up waiting forever, says the ominous Dr. Doom 🔮
  • Beware the sticky spell of inflation, which flutters around bonds like mischievous sprites 🏰

In a curious twist that would baffle any humble clerk, the formidable economist known far and wide as Dr. Doom (though he prefers Roubini at the dinner table) cast his warning like a half-forgotten prophecy. He waved his quill and cautioned traders not to bank on a swift rescue from the Federal Reserve. Why, you ask? Because it seems President Trump’s boisterous tariffs have churned the financial sea into a rather sticky soup of market volatility. 🍲

Only a week ago, Trump threw his tariff net across many lands, notably China, then—voilà—he lifted it to 104%. Markets swooned like fainting aristocrats, fearing the U.S. might tumble into economic gloom and drag others along. Meanwhile, the Nasdaq 100 tripped down 12%, and even the famed bitcoin plummeted 10%, briefly glimpsing the unseemly price below $75,000. 📉

With bond yields prancing upward and equity markets stumbling, folks are whispering about a dreadful dollar liquidity crisis reminiscent of that fiasco five years ago. As in 2020, some say, the dauntless Federal Reserve could flit in like a caped hero, fueling liquidity and propping up asset prices. But according to our ever-so-cheerful Dr. Doom, Chairman Powell isn’t likely to swoop in just yet.

“A game of chicken is afoot,” Roubini pronounced, presumably twirling his mustache, “between the Trump put and the Powell put. But I’d wager Powell’s threshold sits far deeper in the mire than Trump’s. That means the chairman shall calmly sip his tea until our dear President balks first.” ☕

Powell, apparently, won’t prance in to soothe the market’s nerves unless Trump softens his tariff tango. And seeing as this market commotion hails directly from those import antics, it’s hardly a shocker. Still, a single social media puff from Trump could flip sentiment in an instant—no doubt as quickly as a stagecoach scare on a moonlit road. 🌕

Speaking of fireworks and confusion: earlier this week, a rumor about pausing tariffs set the markets ablaze with excitement before—alas—being debunked faster than a country fable. That’s how skittish everyone is. 🤦‍♂️

Sticky inflation, no recession

As if that weren’t enough drama, Roubini envisions inflation holding tight like a stubborn goat, thanks to higher tariffs, thereby foiling the once-fanciful allure of longer-dated bonds. Our dear 10- and 30-year Treasury notes did swoon, sending yields sky-high like a balloon set loose.

Still, our esteemed Dr. Doom says the United States won’t succumb to recession—at least not in the immediate gloom. That seems to contradict the gambling dens of modern finance, which see more than a 50% chance of a dreaded double-quarter downturn. But hey, who are we to question a forecaster who wore the Dr. Doom moniker like a fashionable overcoat? 🧥

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2025-04-09 12:56