Impact of Protectionism on the US Economy

Protectionism threatens to fuel inflation, push up interest rates, and end the bull run in equity markets. The US economy is currently experiencing strong growth, but there are concerns about excessive government borrowing, rising stock prices, and increased consumer spending creating a bubble. President Trump's trade tactics are seen as risky, potentially leading to a trade war that could disrupt global markets.

Federal Reserve Chair's Views on Financial Conditions in the US

Federal Reserve Chair Jerome Powell believes financial conditions in the US are tight despite the surge in equity markets. The market frenzy is encouraging spending among wealthy Americans but not benefiting the less affluent due to inflation and borrowing costs. The wealth effect theory is challenged by wealth disparities, inflation, and rising living costs.