Analyst: Preliminary US-UK Trade Agreement Unlikely to Alleviate Headwinds for US Stocks

According to a report by Jinse Finance, Jake Schurmeier of Harbor Capital stated that despite the limited increase in transparency brought by the US-UK trade agreement, the investment outlook for risk assets remains unattractive. Schurmeier estimates that with a 10% tariff becoming the baseline for the Trump trade agreement, the actual US tariff rate will quadruple to 12%, thereby putting pressure on corporate profit margins. The potential rise in consumer prices could make it difficult for the Federal Reserve to manage inflation expectations and implement rate cuts. He said, "I tend to maintain a neutral stance on stocks," as higher import costs "will significantly slow economic growth, thereby cutting profit margins."