Macro Hive Conversations With Bilal Hafeez
Ep. 251: Phil Suttle on Fed Hiking in 2025
Jan 17, 2025
Phil Suttle, founder of Suttle Economics and former senior executive at top financial institutions, shares valuable insights into macroeconomic trends. He discusses the potential economic policies under a new Trump administration, including the impact of tariffs and immigration on labor supply. Suttle analyzes US productivity recovery post-pandemic and the myths around deregulation. He also examines fiscal challenges and contrasting economic performances in Europe while addressing upcoming Federal Reserve interest rate hikes.
47:04
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Quick takeaways
- The potential return of Trump's protectionist policies, particularly increased tariffs, could elevate inflation and impact global economic growth.
- Changes in immigration policy under Trump may stunt U.S. labor supply growth, leading to increased wage pressures and affecting economic performance.
Deep dives
Trump's Policy Predictions and Tariffs
The economic implications of Trump’s second term are explored through a framework predicting three scenarios: Trump at face value, Trump mild, and Trump aggressive. The scenario viewed as most plausible suggests a return to heightened protectionism, particularly an increase in tariffs which could be universally applied across countries. Trump's shift towards broader tariffs could significantly influence inflation in the U.S. as prices for imported goods rise, with historical references pointing to the infeasibility of relying solely on tariffs for public revenue. The anticipated tariffs could lead to increased domestic goods prices, which would add upward pressure on inflation rates while simultaneously straining global economic growth.
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