Monetary Matters with Jack Farley Joseph Wang: Tariffs Are Coming & They Will Be Bad For Stocks (But Good for America)
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Jan 31, 2025 Joseph Wang, author of "Central Banking 101" and former senior trader at the New York Federal Reserve, shares insights into the economic impacts of impending tariffs. He discusses how financial markets are underestimating the consequences, particularly for key companies like Apple and Nvidia. Wang expresses a bearish outlook on stocks while being bullish on bonds and gold. He also critiques traditional economic models in light of these changes and analyzes the complexities of U.S. monetary policy, especially regarding potential shifts in the Federal Reserve's stance.
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Trump's Tariff Plan
- The market misunderstands Trump's plan to reshape global trade with tariffs.
- Higher tariffs aim to boost US manufacturing for economic and national security.
Tariff Purposes and Inflation
- Tariffs can be a negotiation tool but also aim to reshape trade and raise revenue.
- Their inflationary impact is uncertain, depending on factors like currency and consumer behavior.
2018-2019 Tariffs and Fed Reaction
- In 2018-2019, tariffs weren't inflationary because companies absorbed costs.
- The Fed likely views tariffs as transitory inflation and may not change its policy.
