Overview

• Paul Krugman writes that markets often stay placid until risks become undeniable, setting up a sudden drop he likens to a 'Wile E. Coyote moment.'
• He argues the lack of a sharp market reaction does not vindicate President Trump’s efforts to influence the Federal Reserve for deeper rate cuts.
• The Street notes stocks have rallied about 30% since an April tariff pause, with major indexes hitting records even as the pause ended in August.
• Krugman has flagged Trump’s tariff strategy and immigration crackdown as economic stressors that could drive a violent repricing once complacency breaks.
• Recent context cited in coverage includes Bureau of Labor Statistics data showing hiring flatlined in Trump’s first quarter and Krugman’s view that AI investment is temporarily cushioning recession risk.