Monetary Matters with Jack Farley How Tariffs Jeopardize The Soft Landing | Jonny Matthews, former Brevan Partner, on Bond Yields, Japanese Yen, and Gold
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Mar 5, 2025 Jonny Matthews, a former partner at Brevan Howard and current portfolio manager at Fordham Capital, dives into the economic implications of tariffs, emphasizing their role in driving inflation and affecting growth. He discusses market trends, particularly the bearish outlook for the S&P 500, and the complex dynamics of currency markets, including the dollar-yen exchange rate. Matthews also highlights gold's increasing importance as a safe asset amid global uncertainties, making a case for cautious investment strategies in today's volatile landscape.
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Tariff Troubles
- Tariffs raise prices, slow growth, cut profits, increase unemployment, worsen inequality, and diminish productivity.
- They also increase global tensions, according to JP Morgan's David Kelly.
Strong Economy Pre-Tariffs
- The US economy was robust before tariffs, with strong GDP growth, low unemployment, and healthy balance sheets.
- Matthews questions why tariffs would be implemented given these positive economic indicators.
Complex Supply Chains
- A capacitor's journey illustrates complex supply chains: US, Mexico, Texas, Mexico, US, Canada, US.
- Untangling this could be difficult and affect industries like auto manufacturing negatively.