“Needless to say, widespread military action against U.S. citizens coupled with a resurgence in COVID-19 cases would be…bad,' wrote Tim Duy, an economics professor at the University of Oregon.
After another night of protests and riots across the U.S., President Donald Trump has warned state governors to quell unrest or he will send in the military.
“The best-case scenario is that the riots soon revert to continuous, massive, but peaceful protests. The worse-case scenario is that President Donald Trump acts on his threat to use military force to end the riots,” writes Duy in his influential Fed Watch blog. While more aid to counter the pandemic fallout, alongside continued supportive action by the Federal Reserve, offers a decent setup for financial markets, Duy says that story “feels more vulnerable this week.”
The chart Saxo Bank’s head of macro analysis, Christopher Dembik, says his chart shows “all that is wrong with America right now” — soaring equities and collapsing jobs.
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