Markets are mispricing tariff uncertainty, say academics
Johns Hopkins economists warn of risk from changes to the ‘rules of the game’
Traders are underpricing the risk posed by uncertain US trade policy, say economists at Johns Hopkins University.
Steve Hanke – a former adviser to President Reagan – and Matt Sekerke say even a scenario where tariffs come to rest close to historical levels would leave a continuing risk that US policy-makers change course or renege on existing agreements.
“From the bond market to the equity market, everybody’s just sleepwalking,” says Hanke. “The mispricing is pretty dramatic.”
Sekerke, senior
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