Catch-up

For those just back from a long vacation without access to news — welcome. Here's a quick catch-up in two charts.

Trump’s shock-and-awe approach on tariffs seems to be delivering, at least if you judge by market signals. The USD has weakened meaningfully, down more than 11% year-to-date against the euro, now trading below 0.86. A weaker dollar helps on multiple fronts — not least making U.S. exports more competitive and reducing the external cost of trade wars.

At the same time, U.S. 10-year government yields have remained contained. Despite the noise, inflation expectations appear anchored, and rates have drifted lower in recent weeks. The benchmark yield is now at 4.27%, well off the January highs.

This combination — a weaker dollar and stable-to-lower yields — suggests that markets are starting to price in a potential growth slowdown without yet fearing a disorderly inflation spiral. Whether this proves sustainable remains to be seen, but for now, Trump seems to be getting the market reaction he wanted.

At ECP, we remain focused on the earning power of individual businesses — not the noise, not the headlines.