Bloomberg Surveillance Bloomberg Surveillance TV: December 11, 2024
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Dec 11, 2024 French Hill, a Republican Congressman from Arkansas, emphasizes that tariffs are more about long-term spending reform than simply balancing the budget. David Kelly, Chief Global Strategist at JPMorgan, discusses the Fed's balancing act—navigating current economic realities while anticipating future policy shifts. Both guests highlight the implications of recent CPI data on interest rate cuts, with Kelly expressing cautious optimism from CEOs and small businesses about the economic outlook.
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Tariffs as a Strategic Tool
- Tariffs are more about enforcing long-term spending reforms and priorities than balancing the federal deficit.
- They serve as a negotiating tool to ensure fair market access and prevent subsidized dumping of foreign products.
Support for Government Efficiency
- Embrace external reviews like the Doge Committee to identify inefficiencies and reduce government costs.
- Congressional approval is needed for major staff cuts, but there's enthusiasm for reforms.
Rich Sectors Fuel Inflation
- Inflation is rising mainly in luxury sectors while basic goods experience deflation.
- Inflation will likely trend below 2% next spring due to that diverging pattern.