Capital Economy, Business and Finance
The VIX, Wall Street’s preferred gauge of stock market volatility, is at its highest since August last year.
The EPU index, another gauge of economic uncertainty, is higher than it was after 9/11 or the 2008 financial crash.
Trump’s tariff flip-flopping and Doge’s purge of federal workers seem like the obvious catalysts.
“The biggest downside risk,” writes Torsten Slok of Apollo, “is that policy uncertainty could create a sudden stop in the economy where consumers stop buying cars, stop going to restaurants, and stop going on vacation, and companies stop hiring and stop doing capex.”
Will policy uncertainty send the US into recession? The answer, unhelpfully, is wait and see.
The last US jobs report was robust and personal income growth rose 0.9 per cent between December and January.
Nonetheless, it’s clear this is more than the “little disturbance” that Trump would have us believe.
