Fed waits, market rises & trade talks

One country down, only 194 more to go. Last week, the announcement of a “framework” for President Trump’s first trade deal and the first high-level meeting between the U.S. and China encouraged investors.

Wall Street’s enthusiasm was somewhat tempered, given that the United Kingdom was an easy deal to make. The terms of trade have always favored the U.S., where we have run a capital trade surplus for years. On the China front, U.S. Secretary of the Treasury Scott Bessent met with his counterpart in Switzerland last weekend; on Friday before, President Trump floated the idea of a possible decline in U.S. trade tariffs to 80%, which he said “seems right.” It was a clear message to the Chinese that he wanted to de-escalate his trade war.

[On Monday, the U.S. and China announced reduced tariffs for 90 days. Stocks soared.]

The administration is reportedly lining up deals with several other countries. India, South Korea, Japan, and Australia are in the queue, although the timing is still a question mark. India would have been first out of the box, but the government’s attention has been focused elsewhere over the past two weeks. The delay in an announcement is due to the present hostilities between India and its neighbor, Pakistan.

Given the news on tariffs, this month’s Federal Open Market Committee meeting came and went with hardly a blip. The Fed announced that they were going to sit on their hands for the foreseeable future. Chairman Jerome Powell made it clear just how uncertain the future was.

Few on Wall Street had expected anything more from the Fed than the word “uncertain” when describing Fed policy in the future. In the meantime, stocks climbed higher while precious metals, the dollar, and interest rates continued to be volatile. Gold traders were whipsawed as bullion prices have swung in $50-$100 increments daily this week. The U.S. dollar, which has been in freefall for a month, has also been erratic, while bond yields are in a trading range lately with no significant moves either way.

Both foreign and domestic traders believe the U.S. dollar will fall further. As such, they are looking at currency alternatives to place bets. Gold was the first go-to asset, but speculation has driven the price too far, too soon.

Recently I wrote, ‘For markets to continue their recovery, we need to see the following. A peace deal, the tariffs disappear, China and the U.S. come to a trade agreement, the Fed cut rates, and/or no recession.’ I forgot one more option: the successful passage of Trump’s tax bill, which could significantly impact the market dynamics.

Any two of the above will be enough to stave off a re-test of the lows. Thus far, we have made progress on the tariff front (UK, China, etc.). However, tariffs will not disappear altogether. It appears that no matter what, a 10% tariff on imports is here to stay.

I would guess the possibility of the passage of Trump’s “Big Beautiful Bill” is high, given that the Republican Congress now functions as a rubber stamp on the wishes of the president.

Bill Schmick is a founding partner of Onota Partners, Inc., in the Berkshires.

The views expressed here are not necessarily those of The Lakeville Journal and The Journal does not support or oppose candidates for public office.

Latest News

Voters approve wakesurfing ban

The July 31 referendum in Kent, Warren and Washington banned wakesurfing on Lake Waramaug.

Photo by Alec Linden

The sport of wakesurfing is now banned on lake Waramaug as the result of a decisive tri-town vote held on Thursday, July 31.

Voters in Kent, Warren and Washington, the three towns that border Lake Waramaug, approved the ordinance with 1452 residents ultimately voting in favor of banning the sport against 421 opposed to it.

Keep ReadingShow less
2025 Jubilee Luncheon
   We look forward to seeing you!

Ruth Franklin discusses ‘The Many Lives of Anne Frank’ at Beth David

Ruth Franklin and Ileene Smith in conversation at Congregation Beth David in Amenia.

Natalia Zukerman

Congregation Beth David in Amenia hosted a conversation on the enduring legacy of Anne Frank, one of the 20th century’s most iconic figures. Ruth Franklin, award-winning biographer and critic, shared insights from her highly acclaimed book “The Many Lives of Anne Frank” with thought-provoking questions from Ileene Smith, Editorial Director of the Jewish Lives series. This event, held on July 23 — the date Anne Frank would have turned 96 — invited the large audience to reconsider Anne Frank not just as the young writer of a world-famous diary, but as a cultural symbol shaped by decades of representation and misrepresentation.

Franklin and Smith dove right in; Franklin reading a passage from the book that exemplified her approach to Anne’s life. She described her work as both a biography of Anne Frank and a cultural history of the diary itself, a document that has resonated across the world.

Keep ReadingShow less
Prokofiev, piano and perfection: Yuja Wang at Tanglewood

Yuja Wang performs with the TMCO and Andris Nelsons.

Hilary Scott

Sunday, July 20 was sunny and warm. Nic Mayorga, son of American concert pianist, the late Lincoln Mayorga, joined me at Tanglewood to hear Yuja Wang play Prokofiev’s Piano Concerto No. 2 in G minor, Op. 16. I first saw Wang on July 8, 2022, when she filled in for Jean-Yves Thibaudet on the opening night of Tanglewood’s summer season. She virtually blew the shed down with her powerful and dynamic playing of Liszt’s Piano Concerto No. 1.

Nic was my guest last season on July 13, when Wang wowed us with her delicate interpretation of Beethoven’s Piano Concerto No. 4. We made plans on the spot to return for her next date in Lenox.

Keep ReadingShow less