Macro Mondays – Episode Summary

Podcast: Macro Mondays
Host: Andreas Steno Larsen (with co-host Mikkel Rosenhald)
Episode: Could Trump actually bring global tariffs DOWN?
Date: February 11, 2025

Overview:

This episode of Macro Mondays, hosted by Mikkel Rosenhald and Andreas Steno Larsen, dives into recent developments around Donald Trump’s tariff rhetoric and explores the possibility that, contrary to headlines, his approach could actually push global tariffs down. The discussion covers how world leaders are handling Trump, impacts on specific markets (commodities, energy, equities, cryptocurrency), the business cycle outlook for 2025, and actionable macro investment insights. There’s also significant focus on market sentiment, the Federal Reserve’s liquidity management, and big-picture geopolitical risk.

Key Discussion Points and Insights

1. The “Trump Tariff Friday” Phenomenon

• Pattern of Tariff News (00:31): Every Friday, new messages on tariffs shake the market, sparking fears but often having less impact than expected.
• Andreas notes, "Some of the big countries... have nothing to fear from such a tariff plan, while some emerging markets may suffer a lot" (00:36–01:00).

2. Diplomacy Under Trump: Handling His Negotiations

• Japanese Prime Minister’s approach cited as possible blueprint: agree to Trump’s demands, focus on core interests, leave without a “to-do list” (01:13–01:45).
• Lighthearted reference to Benjamin Netanyahu and Vladimir Putin as other leaders who have “handled” Trump.

3. Macro Entertainment Mix: Kanye as a “Macro Pundit”

• Humorous interlude as the hosts joke about Kanye West tweeting about the Fed’s Overnight Reverse Repo Facility, symbolizing how mainstream liquidity analysis has become (03:50–06:10).
• Notable Quote:

  Andreas: “He might be the first Nazi macro pundit ever... It’s obviously been crazy to follow his tweeting activity, but this tweet was pretty interesting because I think he refers to the overnight reverse repo facility at the Fed Reserve.” (03:50)

4. Fed Liquidity and Crypto Market Sentiment

• The Fed’s overnight reverse repo facility is nearly exhausted; future liquidity management will depend on US Treasury actions (04:30).
• Negative sentiment on Ethereum is at extremes, potentially signaling a reversal if any positive news emerges (06:10–07:09).
• Notable Quote:

  Mikkel: “Very, very direct analysis, directly actionable. Fuck Ethereum. Essentially.” (05:58)

5. The 2025 Business Cycle Outlook

• Underlying fundamentals—especially in manufacturing—are improving even as media focuses on trade headlines (07:34–10:40).
• Rate cuts from 2024 are expected to boost economic activity in 2025 with a lag.
• Manufacturing is gaining momentum over services, which is historically bullish for risk assets (09:30).
• Andreas: “I basically cannot remember a bull market with a weaker sentiment than what we are faced with right now.” (10:28)

6. Investing in a Pro-Cyclical Environment

• Commodities are attractive; first signs of inflation are seen in food, especially eggs (11:47–13:20).
• Other bullish sectors: mining, technology, and financials (14:28–15:33).
• Trump administration is aggressively deregulating finance, even shutting down regulatory agencies (15:33–16:04).
• Quote on deregulation:

  Mikkel: “It seems like the Trump government is trying to, to not only deregulate, but completely deregulate. I mean, burn all regulation to the ground on the financial sector.” (15:33)

7. Oil and Geopolitics

• Oil is cheap predominantly due to supply competition, not weak demand; both US and Saudi Arabia trying to boost export (17:25–18:38).
• Geopolitical risk is rapidly fading: peace deals in Gaza and Sudan, thawing with Iran, and the Red Sea reopening (19:00).
• Mikkel: “Geopolitical risk is fading very, very quickly now... All the fears about an Israel, Iran war must now be silenced completely.” (19:00)

8. Inflation, the Dollar, & Emerging Market Impact

• Utility costs and housing are dragging US inflation down; a soft CPI is expected (20:17–21:26).
• Andreas argues Trump’s reciprocity-based tariffs could lower global tariffs, as emerging markets (esp. India) are forced to match lower US rates to maintain export access (23:20–24:47).
• Quote:

  Andreas: “We should actually expect tariffs to come down globally in my opinion, which is a very contrarian take right now... He’s putting pressure on emerging markets... Trump couldn’t care less about that. He’s a businessman.” (23:50–24:28)

9. Market Strategies and What to Watch

• Soft CPI should drive bond yields down, weaken the dollar, and support risk assets (25:30–26:21).
• European equities—especially banks and mining—are attractive due to relative market positioning and tariff dynamics (27:07–28:22).
• Watch for Wednesday’s inflation report to shift interest rate expectations.

Notable Quotes & Memorable Moments

• “Sometimes may be good, sometimes may be shit.” — The show’s recurring disclaimer, capturing the uncertainty in macro trade ideas (03:28).
• Andreas (on market sentiment):

  “I basically cannot remember a bull market with a weaker sentiment than what we are faced with right now. Everyone I talk to finds the peak to be in and I’m not sure, given how solid a forward looking indicator of the manufacturing cycle is.” (10:28)

• On Trump’s surprising effect:

  “The bottom line... is that we should actually expect tariffs to come down globally... Maybe we’ll end up with, on average, lower tariffs globally because of the pressure he applies to his counterparts.” (24:28)

• On oil geopolitics:

  “The only way to recover those market shares is obviously to produce more... but it’s got to come at a, at a short term cost to their budget.” (18:38)

Timestamps for Key Segments

• 00:31 — Trump "reciprocal tariffs" headlines and global reactions
• 01:13 — How world leaders interact with Trump; Japanese PM’s approach
• 03:50 — Kanye West as an unlikely macro commentator
• 05:58 — Ethereum sentiment at lows; "Fuck Ethereum" quote
• 07:34 — Business cycle outlook for 2025
• 10:40 — Are investors overreacting to Trump headlines?
• 11:47 — Pro-cyclical investing: where the opportunity is
• 14:28 — Equities/sectors to own in this environment
• 15:33 — US financial sector deregulation under Trump
• 17:46 — Why oil is cheap; supply competition
• 19:00 — Geopolitical risks fading: peace prospects in hot spots
• 20:17 — Big drivers of US inflation trends
• 23:20 — US–emerging market tariff reciprocity: could global tariffs fall?
• 25:30 — Headline CPI expectations and market implications
• 27:07 — Why European equities/banks are winners
• 28:30 — Final takeaways: watch CPI, market positioning

Actionable Takeaways

• Don’t overreact to Trump’s tariff headlines; focus on underlying macro data, especially manufacturing strength.
• Commodities and cyclical sectors (mining, financials, tech, materials) look appealing.
• Watch for US inflation data on Wednesday—could signal major policy and market responses.
• Stay alert to the swift fade in geopolitical risk, which is providing tailwinds to risk assets and easing pressures on oil prices.
• Tariffs may decrease globally if Trump’s “reciprocity” approach forces emerging markets to lower their barriers.
• Europe, especially European banks, may be unexpected winners in a shifting trade landscape.

Conclusion

This episode delivers a nuanced breakdown of how Trump’s trade policy noise masks a more positive macroeconomic backdrop—especially for cyclical assets—and may, paradoxically, lead to reduced global tariff levels. With sentiment near historical lows despite robust forward-looking indicators, the hosts urge listeners to keep their eyes on the real economy and play the cycle, not the headlines.