Analyst: Preliminary trade agreement between the US and UK is unlikely to alleviate headwinds for US stocks.

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