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You’ve probably heard the saying, “A bull market climbs a wall of worry.” And after President Trump’s announcement today that 50% tariffs on the European Union could go into effect on June 1, there’s yet another new reason to be concerned.

But is obsessing over every emerging headline really healthy? Successful trading requires a level-head to make decisions. Listen, I’m not saying you need to become a monk to become a trader, but in all of my years of trading, I don’t think I’ve ever met a successful “news based trader.”

But are we really just going to pivot over from bond concerns to tariffs now? That seems rather silly to me, especially since evidence builds that bonds are trying to carve out a bottom. Here’s what I mean…

The Real Tariff Threat - Growth, Not Inflation

In recent weeks, we’ve seen both Home Depot HD and Walmart WMT suggest that they won’t pass off tariff taxes onto consumers. Granted, talk is cheap, so we’ll see what actually happens, but we need to look at the bigger picture here.

A new tax bill is on the way to being passed, and many have suggested that it’s going to further add to the federal deficit. But the catch is that if economic growth accelerates, it won’t be a problem, which is why we can’t just look at tariffs in a vacuum.

We had a terrible bond auction last week, and everybody is expecting interest rates to keep rising.

But my timing indicator is pointing to a low here, right as sentiment is at an extremely negative point. Is that a coincidence? Maybe. Maybe not. I’ve seen this play out enough times in my career to have an idea of where bonds go from here, and I don’t think it’s what most expect.

To take it a step further, I think it’s going to turn into a massive tailwind for technology too.

In short, long-term bonds are going to finally force the Fed to move on short-term rates. The question is whether it happens at the June or July meeting.

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