The View From Apollo Mid-Year Outlook: At the Crossroads of Stagflation—What’s Next?
Jun 27, 2025
Torsten Slok, Chief Economist of Apollo Global Management and a distinguished analyst educated at the University of Copenhagen and Princeton, dives into the nuances of the U.S. economy. He discusses the impact of rising tariffs and the looming threat of stagflation, touching upon consumer confidence and market volatility. Slok analyzes the rising debt-to-GDP ratio and its implications, while also exploring how AI can enhance productivity amidst these challenges. For a lighter touch, he shares top recommendations for captivating TV shows!
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Tariffs' Dual Economic Impact
- Tariffs have a direct impact by increasing import prices and an uncertainty effect that disrupts business and consumer confidence.
- Both effects create complex economic challenges affecting GDP, inflation, and unemployment.
Stagflation Challenges Fed Policy
- Tariffs cause stagflation by raising prices and reducing sales, complicating Federal Reserve policy.
- The key unknown is whether firms will pass tariffs' higher costs to consumers or absorb lower earnings themselves.
Early Signals And Emerging Risks
- Early data shows a slowing economy but controlled inflation, yet risks like student loans restarting and oil price changes may worsen stagflation.
- It's still early to fully assess effects as firms adjust to higher tariffs.