As Donald Trump’s recent tariffs continue to rock the financial markets, concerns have been raised about the US President’s ‘irrational’ behaviour with some even dubbing him ‘insane’
Some fund managers are questioning US President Donald Trump’s rationale as his inconsistent trade policies wreak havoc on the financial markets.
Tom Lee, head of research at FSInsights, expressed concerns in a note on Wednesday morning, before Trump softened his stance on tariffs against U.S. trading partners. “In the last few days, we have had many conversations with macro fund managers,” Lee wrote.
“And their concern is that the White House is not acting rationally, but rather on ideology. And some even fear that this may not even be ideology,” he continued. “A few have quietly wondered if the President might be insane.”
The New Republic highlighted Lee’s comments, where he pointed fingers at Trump for the economic consequences, stating, “multiple officials have stated they do not want nor expect a recession. There are enough economically savvy counsel who are aware of this. Furthermore, the two-to-three percent fiscal stimulus required to overcome a recession would offset any pledged reductions in government spending.”
Lee maintained a logical perspective, noting that Trump’s actions on Wednesday caused market fluctuations by initially imposing steep tariffs on countries globally and then backtracking in the afternoon, announcing a 90-day suspension on tariffs over a baseline of 10 percent for all countries except China. Following China’s declaration of an 84 percent tariff on the US, Trump escalated duties on the world’s second-largest economy to 125 percent, reports the Mirror US.
The markets experienced a significant surge following the announcement of the delay, with the S&P 500 seeing a 7% rise in just a few minutes. “If stocks begin to fail here, this would point to the rising probability we are facing a prolonged period of tightening financial conditions,” Lee penned on Wednesday morning, prior to Trump’s decision to pause.
“Thus, the longer this volatility lasts, the greater the risk the US and the world are getting pushed into a needless recession.”
As reported by the Washington Post, Trump decided to reverse his tariffs after watching an interview with Jamie Dimon, the CEO of JP Morgan Chase, on Fox Business. During the interview, Dimon suggested that a recession was a “likely outcome” of the new trade policy.
Dimon encouraged the president to give Treasury Secretary Scott Bessent more time to negotiate with other nations, highlighting that tariffs can be used to boost commerce. “I’m taking a calm view, but it could get worse,” Dimon warned.
On Wednesday, a reporter questioned Trump about his decision to suspend the tariffs.
“I would say this morning. Over the last few days, I’ve been thinking about it. Fairly early this morning,” he responded. According to National Economic Council Director Kevin Hassett, around 15 nations have made offers to the US, stating on Thursday that the halt was “based on good faith conversations.”
