Investor sentiment is highly disconnected over tariffs as equities and forex markets are showing significant divergence in response to the announcements. This comes amid President Donald Trump‘s take on yen and yuan’s devaluation.
What Happened: According to the senior fellow at the Brookings Institution, Robin Brooks, the divergence in equity and foreign exchange paints two different pictures about the market sentiment on tariffs.
Brooks, formerly the chief FX strategist at Goldman Sachs, highlights that the weakening dollar defies the imposition of “meaningful” tariffs. Whereas, the decline in S&P 500 implies that equities are taking a hit from the tariff news.
“Both can’t be right,” reiterates Brooks in an X post.
Meanwhile, as the U.S. dollar weakens, Trump has said that Japan’s and China’s plan to devalue …
