Trump's Tariffs Sink the Dollar! Is the Rum Gone Too?

Why is the Rum Always Gone?

Savvy? It appears the winds of fortune have turned sour much like a barrel of grog left in the sun. This Morgan Stanley a reputable bunch of landlubbers in the world of finance have predicted President Trump's tariffs will be stirring up more trouble than a kraken in a bathtub. Apparently these 'reciprocal tariffs' – sounds like a fancy dance doesn't it? – are set to hit faster than a cannonball potentially causing inflation to rise like a poorly baked soufflé and economic growth to slow to a snail's pace. Why is the rum always gone? Because someone's always messing with the market that's why!

The Fed: Stuck in the Mud Savvy?

Now the Federal Reserve bless their cotton socks seems to be in a bit of a pickle. With inflation on the rise faster than a monkey up a mast and the economy sputtering like a leaky galleon they're likely to stay put like a pirate guarding his treasure. No sudden moves no daring raids on interest rates. They're waiting for 'greater clarity,' says one of their own Jerome Powell which in pirate speak means they're waiting to see which way the wind blows before hoisting the sails. "The problem is not the problem. The problem is your attitude about the problem." Remember that!

Inflation My Old Foe

Inflation that old sea dog is expected to climb higher than a crow's nest hitting 3.9% by the end of the year. Meanwhile economic growth will be slower than a sloth on a Sunday barely crawling along at 0.8% in 2025 and 0.7% the year after. It's a stagflation scenario they call it. Sounds like a disease you'd catch from a dodgy tavern doesn't it? High inflation and slow growth? It's enough to make a pirate reach for the rum... if there was any left!

No Rate Cuts Until the Cows Come Home!

According to these Morgan Stanley chaps there will be no rate cuts until March 2026. March 2026! That's longer than I've been sober... well almost. And then they predict a series of cuts like a barber gone wild until the funds rate falls. Only a full blown recession could change the course like a rogue wave capsizing the ship. Then they might be forced to cut rates sooner and sharper than a cutlass in a bar fight. "This is the day you will always remember as the day that you almost caught Captain Jack Sparrow!" Well almost fixed the economy.

Traders and Their Shenanigans!

But hold on to your hats folks because the traders are already betting on aggressive rate cuts this year. They see a 45% chance of the first cut coming in May with four cuts by the end of 2025. It seems like everyone's trying to predict the future like a drunken sailor with a map but as we know "not all treasure is silver and gold mate."

Grab Your Tickets!

For those of you brave enough to delve deeper into this financial maelstrom CNBC is hosting an event at the New York Stock Exchange. Learn from the pros network with experts and maybe just maybe find out where they're hiding all the rum. But be warned: "trouble is a dish best served cold." And the markets are looking mighty frosty these days.