Markets Will Dictate Timing of U.S.-China Trade Truce

U.S. and Chinese trade negotiators will spin their wheels on more “constructive” talks and further scheduled meetings, accomplishing little until markets “motivate” them to reach a deal. Think of what happened in the fourth quarter when the financial markets used their “veto” over monetary policy. As Federal Reserve officials talked more and more about raising interest rates and reducing central bank’s balance sheet assets, markets grew more and more uncomfortable.