Macro Voices MacroVoices #475 Daniel Lacalle: Is This The End of The Monetary System As We Know it?
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Apr 17, 2025 
Daniel Lacalle, Chief Economist and Fund Manager at Tressis, dives into the evolving financial dynamics between Europe and the U.S. amid geopolitical tensions. He discusses the implications of Trump Tariffs on investments and highlights the risks of stagflation and a declining euro. Lacalle also critiques the European Central Bank's push for a digital euro and its impact on stability. The conversation offers insights into how these factors could redefine economic cooperation and the future of monetary policy on both sides of the Atlantic.
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European View on Trump Tariffs
- European fund managers see some merit in U.S. tariff arguments but worry about the damaging negotiation tactics.
- The focus on reactionary headlines causes more volatility than understanding the big economic picture.
Tariff Tantrum Caused Volatile Currency Shifts
- The tariff conflict caused a volatile reversal with European managers moving quickly from long USD to euro.
- Long-term structural preference remains for U.S. equities due to stronger margins and innovation.
Stagflation Unlikely in Current Environment
- True stagflation is unlikely because it's hard for consumers to pay higher prices and maintain consumption.
- Instead, a slowdown in prices and economic growth with risk of deflation is more probable now.