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How did anyone in the markets actually believe the two assumptions listed here? It mystifies me that people keep rationalising the actions of someone who clearly has no rationality.

Apr 7, 2025, 9:42 AM

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    "text": "How did anyone in the markets actually believe the two assumptions listed here? It mystifies me that people keep rationalising the actions of someone who clearly has no rationality.",
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          "alt": "A screenshot from BBC news, copy says \n\nThe assumptions about Trump's tactics are now up for question\npublished at 10:32\n\nFaisal Islam\nEconomics editor\nThese stock market falls are pretty shocking to see.\nAs a reminder, a stock market is the best guess of what every company in the world is worth and what their future profits will be.\nWhat we’re seeing in the last few hours is the idea that the rules underpinning everything we know about the economy are changing - and those companies around the world are going to make less profit because of Trump’s tariffs.\nThere were two specific assumptions:\nThat Trump would react to the markets, and that he’d adjust his policy accordingly\nThat he was using these tariffs as a form of negotiation - so you start high, and negotiate down\nAs a result of Trump’s comments over the weekend, and those he made on Air Force One last night, both those assumptions are now up for question.\nAnd the markets are reacting in a really quite violent way.",
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