Trump's Terms Tariff forecast: higher prices, slower growth, no sign of an off-ramp
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Apr 8, 2025 President Trump's trade war is causing ripples across global markets and changing the economic landscape. Experts discuss the looming rise in import tariffs and how this might inflate consumer prices while slowing economic growth. Predictions indicate potential recessions on the horizon, complicating the Federal Reserve's decisions on interest rates. The podcast unpacks the varied responses to these tariffs, highlighting both criticism and support from financial leaders caught in the fray.
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Economic Impact of Tariffs
- Higher tariffs will likely cause increased prices and slower growth.
- This could potentially lead to a recession in the U.S. and slowdowns in other countries.
Federal Reserve's Response
- The Federal Reserve might lower interest rates if a recession occurs and unemployment rises.
- However, current economic conditions, such as low unemployment and inflation, don't support such a move.
Trade Barriers and Tactics
- While President Trump's complaints about trade barriers have some merit, his tariffs might be disproportionate.
- Critics like Larry Summers consider these tactics "predatory," especially towards allies.