Borrowing makes a lot of sense when interest rates and inflation are low. But now, both are returning to more normal levels. This will increase default risk, as companies and people with too much debt find it more difficult to make their repayments.
Chemicals and the Economy
President Trump’s tariff war and planned tax cuts reawaken the ‘bond vigilantes’
Republicans are racing to finish the draft budget by Memorial Day at the end of the month. Bond investors can be forgiven for getting nervous about who is going to pay the bill for Trump’s tariff war and tax cuts.
President Trump’s trade war risks crashing the global economy
Clearly, the US is most at risk from all these changes. Its ‘soft power’ depends on its global reputation. And its ‘hard power’ depends on its global alliances. But President Reagan’s warning applies to all of us: “Then the worst happens: Markets shrink and collapse; businesses and industries shut down; and millions of people lose their jobs.”
Brent falls out of its triangle – for the third time
Oil markets are warning of rising economic and political risk. Prudent companies and investors will be preparing for difficult times ahead, whilst still hoping for the best.
“There are decades where nothing happens; and there are weeks where decades happen” VIadimir Lenin
We are now back in a world where geopolitics, not economics, drives decision-making. It is a world of shifting alliances. And so defence spending is set to be a key growth area for the future as Cold War 2.0 begins.
6 ‘Rules for Success’ as tariff wars and Europe’s Clean Industrial Deal begin
The Rules for doing business have to change. As NATO’s leader, Mark Rutte, has warned, Europe needs to “Raise defense spending or start learning Russian”
Trump’s tariff war confirms geopolitics are replacing economics as the key driver for decisions
The Perennials 55+ cohort have replaced babies as the main source of US population growth since 2005. They already own most of what they need. So the need for globalisation has disappeared. As Trump and Musk are suggesting, a period of rapid and uncomfortable change now seems to lie ahead.
Chemicals must respond to demographic destiny
Demographic changes are now transforming the nature of demand in chemicals and other industries. Far-sighted companies around the world are already adapting their strategies for success in today’s New Normal.
The polls may be close, but normal ‘polling error’ means Harris or Trump could still win by a landslide
Voter enthusiasm is usually key to election victory. And it is clear that Trump’s focus on immigration is enthusing many voters. But logic suggests that Kamala Harris’ focus on women’s reproductive rights makes her best placed to win, potentially with a larger majority than the polls suggest.
Oil and financial markets start to wake up to geopolitical reality
The oil price has rallied 22% over the past 4 months, since it bottomed at $74/bbl. And slowly but surely, traders are being forced to realise that geopolitics are replacing economics as the key driver for world markets.
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