Excess Returns

The Soft Landing is a Myth: Here's What's Really Going on in the Economy | Cullen Roche

19 snips
Mar 20, 2025
Cullen Roche, a renowned financial expert from Discipline Funds, shares his insights on the economy and markets. He challenges the idea of a soft economic landing, emphasizing the complexities involved. Cullen dives into the effects of tariffs as corporate taxes and their inflationary potential. He assesses the national debt's risks while addressing government spending implications. Furthermore, he critiques the bond market's sophistication and discusses how AI technologies are reshaping productivity within corporations.
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INSIGHT

Soft Landing Reframed

  • The Fed successfully slowed the economy to combat inflation from COVID, akin to stabilizing a plane's altitude.
  • However, a true "soft landing" requires returning to pre-COVID economic growth and stability, which is yet to be seen.
INSIGHT

Tariffs as Corporate Taxes

  • Tariffs function as corporate taxes paid by domestic companies, not the exporting country.
  • This can lead to producer price inflation, and whether it translates to consumer price inflation depends on companies' pricing power.
INSIGHT

US Economic Shift

  • The US economy has fundamentally shifted from manufacturing to tech and services, making it unlikely that tariffs will significantly revitalize manufacturing.
  • This shift predates outsourcing and is further driven by automation.
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