The Gambler
This week’s inspiration for my article comes from Kenny Rogers’s 1978 hit “The Gambler.”
President Trump has wasted no time in trying to fulfill many of his campaign promises. We have seen massive proposed “cuts” in Government payrolls, the deportations have begun, the Gulf of Mexico is now the Gulf of America, and his “gamble” – “The Art of The Deal”—regarding tariffs may also be working.
President Trump’s threat of tariffs truly “spooked” our Wall Street Warriors, who pushed rates higher immediately after he took office. I have discussed before that tariffs are a tax on goods and services, which, in most cases, are passed on to the consumer in the form of higher prices. Higher prices mean rising inflation which the interest rate market hates, and the thought of higher inflation in the future is why we have seen mortgage rates rise over the past 3 months. However, it appears that the President may have had a different card up his sleeve, and he used the threat of these tariffs to accomplish other things… specifically with Mexico and Canada. Tariffs on these two countries were to go into effect on February 1, and I think that for a few hours, they were put in place. But, as of today, it appears that both countries are negotiating with the President for more of their help protecting our borders in exchange for no tariffs. This could turn out well for all 3 countries as both Mexico and Canada had threatened to place tariffs on U.S. goods if we were to put them in place. If this were to have happened, prices in all 3 countries would have risen and could have been the start of global inflation. That would not have been good for anyone. At least for now, our Modelo and Molson beers will not rise in price in the U.S., and Budweiser prices in Mexico and Canada will not rise either, which is a good thing for all of us.
Tariffs, in most cases, tend to raise prices, and that would not be a good thing for the U.S. consumer. I’m not saying that using the excess revenue from these tariffs would not be good for reducing the current U.S. deficit. It would have, but at the expense of the U.S. consumer and, at least, in my opinion, the overall health of the U.S. economy. So far, from my chair, he has played the economy card well.
Remember… the BEST RATE… IS A LOCKED RATE… with a float down… ask me about our program that allows you to lock your rate and then float down if rates move lower.
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Blog post date: Thursday, February 6, 2025
