

Tariffs Ripple Through Markets
Feb 4, 2025
In this discussion, Stephanie Roth, Chief Economist at Wolfe Research, dives into how tariffs are reshaping the U.S. economy and the Federal Reserve's policy responses. James Steel, Chief Commodities Analyst at HSBC, highlights the surge in volatility within commodities markets linked to tariffs. Krishna Memani, CIO at Lafayette College, reflects on the impact of high market valuations amidst tariff uncertainties. The trio paints a vivid picture of the interconnectedness of tariffs, inflation, and market dynamics.
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Fed's Response to Tariffs
- The Federal Reserve likely won't change much due to tariff instability.
- Cutting rates doesn't make sense if tariffs increase inflation expectations.
Drivers of US Economic Growth
- US economy growth may cool down eventually, but current growth is driven by strong equity valuations and crypto wealth.
- Consumer spending is boosted by increased net worth and higher propensity to consume in the crypto space.
Labor Market Outlook
- The labor market is currently doing okay, with a solid trend in payroll numbers around 160,000.
- Immigration trends reversing could pose challenges to the labor market and increase wage inflation later in the year.