The Walker Webcast Dr. Peter Linneman, Leading Economist, Professor Emeritus, The Wharton School of Business Part 21
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Apr 17, 2025 
Dr. Peter Linneman, a distinguished economist and Professor Emeritus at The Wharton School of Business, joins the conversation to dissect pressing economic issues. They delve into the potential impacts of tariffs on GDP and inflation, alongside the complexities of the housing market facing skyrocketing prices. The discussion also highlights the disconnect between economic sentiment and reality, scrutinizing retail sales statistics. Listeners are urged to focus on economic fundamentals amid market volatility and evolving consumer dynamics.
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Tariffs Impact GDP & Inflation
- Tariffs act as a tax and significantly raise costs on about 10% of the economy, which reduces GDP growth.
- A one-time inflation shock of around 1.2% may be followed by modest deflation as adjustments occur over time.
Fed's Rate Cuts & Tariffs
- The Fed sees the tariff-driven inflation increase as transitory and may look through it without raising rates.
- Rate cuts will focus on supporting the economy from tariff-related growth hits rather than inflation concerns.
Market Moves Driven by Uncertainty
- Market moves last week reflected uncertainty and rising risk premiums, not just foreign dumping of treasuries.
- Investors should focus on fundamentals like GDP, employment, and inflation instead of market noise.