Excess Returns
The Monumental Miscalculation | Jared Dillian on Tariffs, Fed Risks, and Where Markets Go from Here
Apr 26, 2025
Jared Dillian, the contrarian economist behind the Daily Dirt Nap newsletter and host of the Macro Dirt Podcast, dives deep into the current market landscape. He argues that tariffs may actually be deflationary, challenges the notion of a strong dollar in the long run, and shares insights on the shift towards international stocks. Dillian also discusses his unique investment strategy—an 'Awesome Portfolio'—and the risks of protectionism while highlighting the evolving importance of social media in gauging market sentiment.
54:22
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Quick takeaways
- Jared Dillian argues that larger tariffs often lead to deflation by decreasing consumer demand and causing economic slowdowns.
- He predicts a significant long-term decline of the dollar, suggesting capital flight fears may accompany any temporary strength.
Deep dives
The Impact of Tariffs on Inflation
Tariffs are viewed as having a deflationary effect rather than an inflationary one. The speaker explains that when tariffs increase prices drastically, consumer demand decreases, leading to a slowdown in economic activity. Examples include how a significant price hike on goods leads consumers to opt out of purchases, signaling demand destruction. The discussion highlights that while small tariffs can be inflationary, larger tariffs tend to result in deflation due to reduced consumer spending.
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