Bloomberg Surveillance

Tariff Uncertainty Ahead of the Fed Meeting

22 snips
May 6, 2025
Torsten Slok, Chief Economist at Apollo, shares his insights on tariff uncertainties and their implications for the U.S. economy, warning of a potential recession in 2025. Jeffrey Rosenberg from BlackRock discusses the shifting investment landscape and expectations around Fed interest rate decisions. Meanwhile, NYC Mayoral Candidate Zohran Mamdani addresses housing affordability and community safety in his candidacy, emphasizing a balanced political identity to tackle city challenges.
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INSIGHT

Tariff Impact on Earnings and Economy

  • Tariffs have caused significant downward revisions to earnings for Q2 and Q3 for the S&P 500.
  • They disrupt normal currency-interest rate correlations and contribute to stagflation risks in the US economy.
INSIGHT

Fed Faces Stagflation Dilemma

  • The Fed faces a dilemma between slowing growth and rising inflation due to tariffs causing stagflation.
  • The dot plot indicates the Fed may prioritize growth with future rate cuts despite inflation risks rising to near 3.8%.
INSIGHT

Uncertainty and Fed Challenges

  • Policy uncertainty from tariffs creates unmeasurable uncertainty complicating market reactions.
  • The Fed's challenge is managing conflicting objectives of growth slowdown and inflationary pressures from tariffs.
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