Bloomberg Surveillance
Trump's Market Impact and the Next Fed Meeting
Jan 23, 2025
Adam Posen, President of the Peterson Institute for International Economics, discusses the Fed's outlook and the implications of Trump's economic policies. He highlights concerns over potential rate hikes and inflationary effects from proposed tariffs. Sarah Wolfe, Senior Economist at Morgan Stanley, comments on jobless claims and hints at a possible rate cut in early 2025. Together, they explore the interplay between macroeconomic trends, protectionism, and the evolving labor market, offering keen insights for investors amidst rising tensions.
32:43
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Quick takeaways
- The podcast highlights how broad tariffs could lead to significant inflationary pressure on U.S. households and potential product shortages.
- Experts discuss the shift towards protectionism in U.S. trade policy, threatening global integration and complicating economic opportunities for developing nations.
Deep dives
Impact of Tariffs on the Economy
Tariffs on imports, specifically when applied broadly, are likely to create significant inflationary pressure on U.S. households. A potential increase of 10 to 15 percent across most industries would not only act as a heavy tax on consumers but could also lead to shortages of various products. This situation is compounded by the likelihood of retaliation from trading partners, which can shrink economic activity further. Experts emphasize the need to analyze the full ramifications of such tariffs to understand how they would affect the broader economy and multilateral trade relationships.
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