by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with our thoughts on the latest US proposal to Iran. We then turn our attention to signs that the Fed is growing increasingly divided. After that, we briefly address the rising trade tensions between the EU and US, China’s decision to uphold US sanctions, and the EU’s progress in developing its own weapons. As always, we include an overview of recent domestic and international economic data.

Iran Deal Nearing: The United States and Iran appear to be moving closer to a deal that could end the standoff in the Strait of Hormuz. On Wednesday, reports indicated that Iran is reviewing a one-page memorandum outlining a framework for the gradual reopening of the waterway. The proposal is intended to break the current impasse, as both sides seek to ease mounting economic pressures while continuing negotiations over a broader nuclear agreement. Ongoing progress in talks is supporting market sentiment, with signs of escalation continuing to recede.

• While Iran has not yet made a final decision, internal divisions appear to be slowing progress. Moderate factions worry that a prolonged conflict and continued blockade will intensify domestic political pressure. In contrast, hardliners argue that the White House may also be under pressure to secure a deal, potentially strengthening Iran’s negotiating position. For now, it remains unclear which side holds the upper hand.
• Washington, however, appears ready to pivot as it looks to refocus on negotiations with China. The White House had postponed talks due to the conflict but is now expected to resume discussions later this month, likely covering trade, investment, and broader foreign policy issues. The shift comes as both countries continue to position themselves to gain leverage in the negotiations.
• Progress in talks with Iran, alongside a renewed push toward negotiations with China, should help reduce overall market uncertainty. If the White House is able to reach agreements with both counterparts, it would likely support risk sentiment and could pave the way for a gradual rise in asset prices over the coming months. However, we could see a return of volatility if there are setbacks in either case.
• While the outlook is improving, there are still signs the market may be underpricing near-term risks. In particular, food and energy prices are likely to remain affected by the conflict for longer than currently anticipated, which could weigh on earnings in the current quarter. That said, we view these pressures as largely transitory and not sufficient to push the economy into recession. In this environment, increasing exposure to value-oriented assets may help provide a buffer within portfolios.

 Fed Becoming Divided: Just a week after Fed Chair Jerome Powell held his final press conference at the Federal Reserve, several Fed officials have begun voicing concerns over rising inflation. This week, St. Louis Fed President Alberto Musalem and Chicago Fed President Austan Goolsbee both signaled unease about increasing price levels. Their worries have, in turn, fueled concerns that Fed officials may not be ready to cut interest rates this summer, even as incoming Fed Chair Kevin Warsh is set to take office later this month.

• The Chicago Fed president’s primary concern centers on a potential timing mismatch. He has argued that the AI-driven investment boom, alongside stronger consumption, could elevate demand before productivity gains are sufficient to offset it. In such a scenario, he suggested the Fed may need to consider future rate hikes rather than easing policy.
• While Musalem struck a more measured tone on the rate outlook — emphasizing that policy could move in either direction — he also flagged potential inflationary risks stemming from AI. In remarks to the Mississippi Bankers Association, he noted that the AI-driven expansion, alongside factors such as fiscal policy, monetary policy, and elevated equity markets, appears to be contributing more to current inflationary pressures than traditional drivers like geopolitical developments and trade shocks.
• Comments from Musalem and Goolsbee likely reflect a widening divide within the FOMC as it prepares for a transition to presumptive Fed Chair Kevin Warsh. Warsh has previously argued that the Fed should be more willing to adjust rates to support the supply-side benefits of AI. However, that stance may prove difficult to sustain if policymakers conclude that rate cuts risk amplifying inflationary pressures, particularly if productivity gains lag behind demand-driven effects.
• Given the divergence in views on the inflation outlook and monetary policy, we continue to expect elevated volatility in longer-duration securities. The 10-year Treasury yield is currently hovering near the upper end of its roughly 4.2%–4.5% range from the past 18 months, suggesting some near-term scope for a bond rally. However, a sustained bull market in bonds will likely require greater clarity on the policy path and increased confidence that inflationary pressures are easing.

EU Not Aligned: The EU has struggled to secure consensus among member states on implementing the framework outlined in President Trump’s trade deal. The dispute stems from the bloc’s failure to follow through on proposed legislation to eliminate tariffs on US industrial goods in exchange for a US commitment to cap tariffs at 15%. In response, Washington has threatened to impose tariffs of up to 25% on EU auto imports. While tensions appear contained for now, underlying trade frictions continue to build.

China Complies: Beijing has reportedly instructed its banks to halt lending to refiners that violate US trade sanctions, reversing guidance issued just a day earlier. This abrupt shift may signal an effort by Chinese authorities to de-escalate tensions ahead of scheduled talks with the US later this month. If sustained, the move suggests Beijing could be positioning itself to take a more constructive role in easing trade frictions during upcoming negotiations.

EU Defense Missiles: The German defense group Rheinmetall has announced progress in developing deep-strike weapons. The company states that it can develop cruise missiles as well as rocket artillery and expects to begin development later this year or early next. This rise in weapons manufacturing comes as European nations accept that they must build up their own defense capabilities to fill the void left by the United States taking a less hands-on role within NATO. We continue to believe that this shift should benefit European defense companies.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with the big weekend surge in global energy prices, which has pushed Brent crude well above $100 per barrel and threatens to push US gasoline prices above $4.00 per gallon in the coming weeks. We next review several other international and US developments with the potential to affect the financial markets today, including growing tensions between the US and Israel over the conduct of the war and promises by the US administration to quickly develop a system to rebate tariffs that the Supreme Court recently invalidated.

US-Israel-Iran: Citing an unnamed administration official, Axios reported over the weekend that the US and Israel are mulling sending special operations forces into Iran at a later stage in the war to seize the country’s stock of enriched uranium and/or to seize its major oil export terminal on Kharg Island. The moves would aim to end Iran’s current nuclear weapons program and allow long-term control over its oil exports and economy.

• The risk is that the small special ops forces could find themselves overwhelmed by Iran’s army and other forces. In that case, the pressure would rise for the US and Israel to commit large-scale “boots on the ground.” In turn, that could create further political headwinds for the administration, raising the possibility of the Democrats taking control of at least one chamber of Congress in the November midterm elections.
• Separately, Iranian clerical leaders over the weekend chose Mojtaba Khamenei, son of the slain previous leader, to be the country’s new supreme leader, defying President Trump’s assertion that the son was not acceptable. The naming of Mojtaba Khamenei as supreme leader is being widely interpreted as a sign that the Iranian leadership will fight to the death rather than capitulate to US and Israeli demands in the war.
• Separately, the Strait of Hormuz remains essentially closed, throttling shipments of oil, gas, fertilizers, and other commodities and driving up prices for those commodities. Earlier today, Brent crude oil jumped by more than 25% to almost $120 per barrel before pulling back to about $105 per barrel at this writing. Natural gas prices have also surged again today, while gold, silver, and copper prices are modestly lower, probably reflecting concerns about stagflation and elevated interest rates.
• While the Trump administration has insisted it will not release oil from the US’s strategic petroleum reserve to hold down prices, the International Energy Agency today is coordinating an emergency meeting of finance ministers from the Group of 7 major nations to discuss a joint release of oil from their reserves. Historically, releases from the SPR in times of crisis have helped push oil prices lower.

United States-Israel: One development that has also helped push up energy prices today and rattled financial markets is that Israel attacked 30 of Iran’s fuel storage facilities over the weekend, going far beyond what US officials expected when Tel Aviv informed them of the impending attacks. The Israeli attack could invite Iran to increase its attacks on oil and gas facilities across the region, potentially sparking long-term supply shortages even if the Strait of Hormuz is reopened quickly. The attacks have also increased US-Israeli political tensions.

US Tariff Policy: Ahead of a late Friday meeting between administration lawyers and the federal judge who struck down most of President Trump’s new tariffs, US Customs and Border Protection official Brandon Lord announced that the government will develop a system for returning $166 billion in tariff ‌payments to around 330,000 importers within 45 days. Lord also vowed that the new system would only require minimal submissions from affected companies.

• If the tariff rebate system is up and running as quickly as promised, it would suggest firms could see a significant influx of cash in the second quarter. Firms could potentially accrue the rebates in the first quarter, raising corporate earnings. In any case, the rebates are likely positive for US stocks.
• Of course, one issue will be the extent to which firms share the rebates with their customers, either by outright refunds or lower prices going forward.
• Finally, it’s important to remember that any rebates paid will have a negative impact on the federal budget deficit and debt levels.

US Housing Policy: Senators working on legislation designed to make housing more affordable have inserted a provision that would prohibit large-scale investors from buying existing single family homes and would require them to sell their newly built rental properties to individuals within seven years of completing them. The industry has begun pushing back fiercely against the idea, and it isn’t clear if it will ultimately be signed into law. Nevertheless, it represents a risk to firms aiming to buy and rent out large numbers of homes.

China-Russia: Beijing’s draft five-year plan for 2026-2030 reportedly includes funds for two pipelines transporting natural gas from Russia, suggesting President Putin’s pet project to strengthen China-Russian economic relations, the Power of Siberia 2, could be on the fast track for construction. The pipeline would likely take years to complete, so it won’t make much difference for today’s energy crisis. However, it would likely cement Russia’s role as a key gas supplier for China for years to come.

China: The February consumer price index was up 1.3% year-over-year, beating expectations and accelerating from the 0.2% rise in the year to January. According to the national statistics agency, the acceleration was driven by surging oil prices as tensions around Iran heated up and strong demand around the Lunar New Year holidays. Consumer price inflation is now at its highest in more than three years. However, producer prices continue to fall amid excess production.

Germany: In regional elections in the key industrial state of Baden-Württemberg yesterday, the left-wing Greens narrowly came in first with 30.2% of the vote, edging out Chancellor Merz’s Christian Democrats despite opinion polls showing the CDU would win. Just as important, the far-right Alternative for Germany party nearly doubled its vote share to 18.8%. The results point to a further weakening of the country’s traditional centrist parties.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with our views on how the Middle East conflict is shaping the monetary policy outlook. We then provide a brief overview of other key market developments, including state lawsuits seeking to roll back the latest tariffs, new restrictions on chip exports, normalizing ties between the US and Venezuela, and the escalating dispute between the Pentagon and Anthropic. We also include a summary of recent US and international data releases.

Iran and Monetary Policy: The escalating Middle East conflict is clouding the Federal Reserve’s policy path, introducing fresh uncertainty as it threatens to reignite inflation. Heightened tensions are raising alarms over potential global supply chain disruptions, with Brent crude nearing $90 a barrel and US gasoline prices climbing nearly 30 cents since hostilities began. This renewed price pressure has led to concerns that the Fed could pivot from debating when to cut rates to weighing whether hikes are needed to balance supply and demand.

• Concerns over the potential inflationary impact of the war have already begun to weigh on both the fixed income and currency markets. The 10-year Treasury yield has surged, rising nearly 15 basis points over the last three days to hit a three-week high. Meanwhile, futures markets are rapidly pricing out expectations for rate cuts, with war-induced price pressures now seen as a key factor that could prevent the Federal Reserve from easing policy at all this year.
• The recent market moves highlight concerns that the war could last longer than initially expected and potentially widen its geographic footprint. Azerbaijan has accused Iran of drone attacks on its territory and demanded explanations from Tehran, underscoring the risk of spillover along Iran’s northern border. At the same time, a US submarine strike that sank an Iranian warship off the coast of Sri Lanka has brought the conflict directly into the Indian Ocean, closer to key shipping routes serving India and Sri Lanka.
• The conflict has already raised alarms about supply chain disruptions amid slowing trade flows. The Strait of Hormuz, a critical global shipping chokepoint, has already seen traffic sharply curtailed, raising the risk of broader trade bottlenecks. While energy markets have drawn the most attention, regional instability is also affecting other commodities, with industrial metals such as aluminum increasingly vulnerable to being caught in the crosshairs.

• What the Fed does next will likely hinge on whether the conflict creates a meaningful supply/demand imbalance. If policymakers judge that supply disruptions could trigger a sustained price shock, they may feel compelled to pause rate cuts and even consider another hike. By contrast, if they expect the conflict to be short-lived, with supply normalizing quickly, or if they believe weaker demand will contain inflation without further action, then they may opt to keep policy unchanged.
• The labor market is likely to be another key factor in whether the Federal Reserve shifts its policy stance. After a weak 2025, when employment recorded the slowest non‑recession job growth in more than two decades, hiring now appears to be stabilizing and gradually improving. If that nascent recovery were to fade, Fed officials could feel pressure to lower rates to support job creation.

• In our view, the recent conflict and associated risk of a supply shock have likely reduced the scope for rate cuts this year, given the potential for higher input prices to feed into inflation. That said, we still see the possibility for some easing, assuming the conflict is resolved relatively quickly or the labor market slips back toward the pronounced slowdown seen in 2025.

Tariff Troubles: Several US states are pressing the Trump administration to halt the next round of tariffs following the Supreme Court’s decision to overturn the original measures. The pushback comes as the White House seeks alternative ways to ensure trading partners comply with the terms of its trade agreements. This added friction is likely to deepen uncertainty for businesses, which are struggling to assess whether current or proposed tariffs will ultimately remain in place, potentially leading to a period of strategic inertia.

Chip Restrictions: The US is weighing new rules that would further limit where chipmakers can do business. Under draft regulations from the Commerce Department, exports of certain chips would be restricted to destinations that have not received explicit approval from the White House. Although not yet final, the proposal could effectively curb the sale of most high‑end AI accelerators. The move underscores the government’s growing role in shaping the broader economy.

‘Don’roe Doctrine: The US and Venezuela have officially restored diplomatic ties, highlighting Washington’s renewed focus on Latin America. The move follows the US-backed transition that removed Nicolás Maduro from power earlier this year and signals a desire to draw South America more firmly back into its strategic and economic orbit. In our view, South American countries that deepen ties with the US could benefit from preferential trade access and increased investment flows, making them potentially attractive destinations for long‑term capital.

AI Showdwon: The dispute between Anthropic and the Pentagon has intensified after the US government formally categorized the AI firm’s technology as a supply-chain risk. The designation could restrict Anthropic from future defense collaborations and threatens its existing $200 million Pentagon contract. The conflict stems from disagreements over the company’s willingness to support certain government applications that it believes conflict with its internal ethical guidelines. This standoff could set a precedent for future public-private partnerships.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with our take on China’s decision to revise its growth target. We then discuss the US economy in light of the latest ISM survey and ADP report. Next, we provide an update on Iran, examine another key breakthrough for crypto, and assess US shale’s ability to meet incremental demand following the Middle East conflict. We close with a summary of key US economic data and notable moves across global markets.

China Rethinks Target: The world’s second-largest economy has lowered its GDP target for the first time since 2023. On Wednesday, Beijing announced it would cut its growth target to a range of 4.5% to 5.0%, down from the previous target of 5.0%. The downgrade is being viewed as a signal that the government is willing to tolerate slower expansion as it pivots its growth model to address current challenges, including global pushback against its export-led strategy and a struggling real estate sector.

• Beijing’s move to set a lower growth target range is widely seen as giving policymakers more room to tackle structural problems such as industrial overcapacity and weak domestic demand — issues that have also drawn criticism from key trading partners. At the same time, China’s state-led growth model has come under intensifying scrutiny, with the IMF recently urging Beijing to scale back sizable industrial subsidies and shift toward a more consumption-led model.
• A transition in China’s growth model would be desirable, but it is unclear if the government is prepared to make the pivot. Consumers are seeing their net worth erode as the real estate sector continues to struggle, depleting household savings. Meanwhile, rather than stepping in with stimulus to restore confidence, Beijing has chosen to trim subsidies for consumer goods, raising questions about its commitment to supporting households through the transition.
• That said, the shift represents an opportunity for China to negotiate a trade pact with the US as Presidents Xi Jinping and Donald Trump prepare to meet in a few weeks. The White House has signaled that any new agreement will require China to reform its export model and improve access for US business interests. Consequently, a lower growth target may signal China’s willingness to alter its economic model in exchange for reduced tariffs.
• While the market ramifications of China reducing its growth target may not be immediate, we believe the move is a net positive if it paves the way for more productive trade talks. A potential agreement would benefit both equity markets but would be particularly impactful for US tech companies. In particular, a deal that loosens restrictions on Chinese rare earth minerals, critical components for emerging technologies, would provide a significant boost to the sector.

Economic Momentum: There are growing signs that the economy is gaining momentum as firms become more confident about future planning. The latest ISM Purchasing Managers’ Index showed business activity accelerating at its fastest pace since 2022, rising from 53.8 to 56.1 in February. Meanwhile, new data from ADP revealed that private employers added 63,000 jobs last month, well above the downwardly revised 11,000 in January, marking the strongest gain since July and suggesting companies are increasingly optimistic about future demand.

• The latest ISM services report points to a clear pickup in demand. Key components such as inventories, backlogs, and new export orders are all in expansion territory, indicating a broad-based surge in activity. At the same time, the prices‑paid index has fallen below its 12‑month average, signaling that cost pressures, while still elevated, are starting to ease.
• Meanwhile, private payroll data show that healthcare remains the primary driver of job growth, adding 58,000 positions in February. Construction also contributed significantly, with a gain of 19,000 jobs, while the information sector added another 11,000. In contrast, employment across most other sectors either declined slightly or remained largely unchanged from the previous month.
• Despite ongoing economic improvement, business sentiment is being tempered by significant concerns over tariffs and the disruptive potential of AI. The latest ISM report underscores this shift, with anecdotal commentary revealing an intensified focus on cost pressures. On the labor front, the absence of robust job gains points to a prevailing “low hire, low fire” mentality. Crucially, this corporate caution regarding workforce expansion appears to be directly amplified by the rapid iteration and integration of AI technologies.
• Overall, the economy continues to demonstrate resilience and is likely to remain on solid footing barring a major external shock. However, uncertainty surrounding tariffs and AI disruption warrants a cautious stance. We recommend managing risk by maintaining a balanced portfolio that includes diversifying beyond technology into other overlooked large cap sectors poised for growth, while also adding international exposure to hedge against domestic volatility.

Iran Update: The conflict has now entered its sixth day, and there are still no clear signs of an off-ramp. Iranian officials on Wednesday rejected reports of backchannel talks with the United States and warned that their war efforts will intensify. The White House, however, continues to express confidence that it has degraded Iran’s capacity to strike and is moving closer to bringing the conflict to an end. We continue to presume this turmoil will affect commodity markets, with higher oil prices and aluminum prices now also moving up. 

Crypto Access: In a landmark move for digital assets, the Federal Reserve has granted its first master account to a cryptocurrency firm. Kraken Financial secured a limited-purpose master account, providing direct access to the Fedwire Funds Service. This integration allows for significantly faster transfers and serves as a pivotal signal that cryptocurrency is maturing into a mainstream fixture of the global financial system.

US Shale Constraints: US shale drillers are signaling they may struggle to meet additional supply needs in the wake of the recent Middle East turmoil. Their main concern is that the high cost of new projects could undermine competitiveness at a time when the industry is focused on repaying shareholders. New developments are also expected to take time before coming online, limiting the near-term response. Taken together, constrained US supply suggests a prolonged conflict in the Middle East could keep oil prices elevated.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with our assessment of the latest developments in Iran. We then examine how the conflict is reshaping the US relationship with its transatlantic allies. Next, we look at the Texas primary elections, review a new report on Germany’s infrastructure woes, and highlight emerging signs of renewed US engagement in South America. We also include a summary of key US economic data and notable moves in global markets.

Iran Conflict Broadens: Iran’s actions have disrupted trade throughout the Middle East and damaged several key oil storage facilities. Both Saudi Arabia and Iraq are reportedly running short on storage capacity in the aftermath of the attacks. Meanwhile, China has faced difficulties securing the energy supplies it depends on from the Strait of Hormuz. These developments drove a sharp spike in energy prices, which were later eased following the US announcement of plans to escort tankers through the region’s troubled waters.

• There are growing signs that the US is making meaningful progress in its campaign against Iran, sparking debate over what comes next. US officials say ongoing strikes are steadily degrading Iran’s ability to threaten American interests and regional partners. At the same time, President Trump has cautioned against leaving Iran with a leader who is “no better” than the previous ruler. As a result, the administration has left open the option of deploying US ground forces, even as it insists such a move may not be necessary.
• That said, the conflict has shown signs of intensifying. Iran appears to be broadening the conflict across the Middle East to provoke its neighbors into intervening. The campaign escalated sharply this week with major strikes on Monday against the US Embassy compound in Riyadh, Saudi Arabia, and on Tuesday near the US Consulate in Dubai. The UAE has been a primary target, facing nearly as many drone and missile attacks as Israel.
• As of this morning, there are tentative signs that Iran may be seeking an off‑ramp from the conflict. Reporting indicates that Iranian intelligence officials have made indirect contact with US counterparts to probe possible terms for ending the war. This comes amid mounting signals that Mojtaba Khamenei, the son of the late Supreme Leader Ali Khamenei, has emerged as the regime’s favored choice to succeed his father, even if that succession has yet to be fully formalized in public.
• While we are cautiously optimistic that the conflict could wind down in the coming days, there are still no definitive signs that an end is imminent. We continue to see maintaining commodity exposure as a prudent stance for now, with prices, especially in energy, likely to remain supported by ongoing disruption and uncertainty. That said, if tensions begin to ease in a more durable way, a rotation away from commodities could already be in its early stages.

Allies Disunited: The US-Israel joint operation has triggered notable pushback as several allied governments question the speed and scale of the escalation. On Thursday, Spain and the UK were sharply criticized by the White House after both initially refused to let the US use military bases on their territory to conduct strikes on Iran. In response, President Trump has threatened to cut off trade with Spain and publicly disparaged UK Prime Minister Keir Starmer’s leadership, saying he is “no Churchill.” The friction is another sign of the fraying transatlantic relationship.

• Around the world, the response has been mixed, with many US allies stressing that Iran’s nuclear ambitions and regional aggression must be constrained even as they voice concern about the scale and legality of the US‑Israeli strikes. This tension was captured by Canadian Prime Minister Mark Carney, who backed efforts to prevent Iran from obtaining a nuclear weapon “with regret,” called the conflict “another example of the failure of the international order,” and urged rapid de‑escalation in the region.
• Disagreements over the Iran strikes are emerging just as the US and its allies rework their broader security relationship. Washington is pressing partners to shoulder more of their own defense burdens, while the rest of the West steps up support for Ukraine and adjusts to a less predictable role from the US. This shift has pushed other Western countries to accelerate defense spending and raise their international profiles, from military outlays to crisis diplomacy in Ukraine and the Middle East.
• While we do not think the US will completely abandon its Western allies, we do expect them to gradually diversify their exposure to the US. This is likely to involve strengthening their own defense capabilities, deepening trade ties with other partners, and reshaping their financial markets to better compete with the US for investment flows. Nevertheless, this would be a drawn‑out adjustment rather than a rapid, wholesale shift.
• This gradual diversification is mirrored by a broad de‑risking across global markets, where the prolonged conflict appears to have shifted investor sentiment. Gold and silver have declined even as the dollar has strengthened, underscoring its continued status as the cornerstone of the financial system. While the dollar has since given back some of its gains as of this writing, we will be watching closely to see whether this marks the start of a more durable trend.

Texas Primary: The Texas primary saw James Talarico defeat his Democratic rival, Jasmine Crockett, in a closely watched US Senate contest. On the Republican side, Senator John Cornyn and Attorney General Ken Paxton both advanced to a runoff for their party’s nomination. The Senate race has drawn international attention because it offers Democrats a rare chance to flip a seat in a state that has been reliably Republican for decades, with potential implications for the chamber’s balance of power.

German Infrastructure: Germany has pledged to improve its military readiness, but recent reports suggest it still has a long way to go. While its armed forces now benefit from better equipment and facilities after Berlin moved to strengthen security in the wake of Russia’s invasion of Ukraine, chronic underinvestment means basic infrastructure remains a major constraint. We continue to view higher defense outlays as a positive catalyst for German equities, particularly within the country’s defense sector.

US Ecuador: The US is continuing to deepen its ties across Latin America, in what increasingly resembles a modern Monroe Doctrine-style approach to the region. On Tuesday, the US and Ecuador launched a joint military operation targeting drug trafficking, underscoring Washington’s growing security footprint. We see this kind of cooperation as a potential precursor to closer economic links as well, suggesting that South American countries with strong relationships with the White House could become attractive destinations for investment.

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