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Americans beware: markets can be out of sync with reality

We should avoid being lulled into complacency by economic conditions that are still reasonably solid

The writer is a former US Treasury secretary

The stock market keeps reaching new highs: the S&P is up more than 7.3 per cent since the Iran war began. About 85 per cent of companies in the index reported first-quarter earnings that beat first-quarter expectations, and analysts have raised profit forecasts in recent months. 

However, these gains come alongside actions by the Trump administration that I believe will have significant adverse consequences. The administration did not just launch a war in Iran that destabilised energy markets, President Donald Trump threatened to annihilate the country’s citizens. He repeatedly voiced support for a criminal probe into outgoing Federal Reserve chair Jay Powell that was a thinly veiled attack on central bank independence. 

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