China Trade Deal Doesn't Change Where We're Headed | Luke Gromen
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great to be back. I'm I'm doing well. It's, just enjoying spring finally breaking here in lovely Cleveland, Ohio. So Love
it. And, yeah, hopefully, you had a wrestle weekend because we are recording on the Monday and, you know, to say the least, every day you show back up the markets on on on the start of the week. There's just endless things to talk about. So, yeah, we're recording here a few hours after we got some meaningful developments in terms of the trade deal from China and what is occurring there. So, overall, the way I see it is that the the Chinese government and and The US, led by, you know, treasury secretary Scott Besant and, trade representative Jamieson Greer seem to have narrowed a 90 pause where
Overall, I think it's still pretty early to tell for sure. I mean, for me, I think there's a couple key takeaways, which are, they are who we thought they were on The US side, which is to say, our view is that this was gonna create treasury market dysfunction pretty quickly. It did. And as soon as it did, we saw The US weaken its soften its stance. And that's not to say the Chinese weren't feeling, quite a bit of pain themselves, because I think they were. But, ultimately, you know, as I look out from here going forward, I I don't see how you get some sort of deal that doesn't feature a much s
Yeah. I'd love to dig in deeper to really understand where you think the constraints are in terms of the strategic imperatives, especially from the China side. You've had some really interesting analysis there on on some of their more high level goals there. But it was really interesting to me to hear treasury secretary Scott Bessen talk about how, you know, they don't wanna fully decouple from China, but there is some strategic imperatives that they wanna focus on where they wanna have a more robust independence in terms of, you know, steel, you know, pharmaceuticals, semiconductors, etcetera
that has been I I've had a hard time figuring out in my own mind as I've watched this situation transpire over the last, you know, probably three and a half, four months now. I guess they were, you know, might maybe just short of, four months since they were inaugurated, has been the amount of contradictions in The US policy, which is we wanna decouple, but, like, we don't wanna all the way decouple. Right? We wanna get prey. We don't wanna be all the way pregnant. You know, we wanna decouple, but we don't wanna have treasury market dysfunction. You know, we wanna have dollars recycled into Am
To your point about, you know, saying one thing but doing another and especially when there is that dissonance, another thing I heard from from treasury secretary Scott Besant is he mentioned that most of the discussions in those talks over the past weekend were about the balance of trade. There were no discussions about currency accords of of the like. But to your point, you know, we're seeing the yuan strengthen. We're seeing bond yield surge today as well. There's some in
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