Impact of Tariffs on the Economy

The discussion highlights the potential consequences of implementing significant tariffs, particularly on the automotive industry, which could result in increased consumer prices. Despite President Trump's warnings to the auto companies not to raise prices, the skepticism remains about whether they will comply when facing higher costs due to tariffs. This situation complicates the economic landscape, as rising prices could lead to a shift in inflation expectations from the Federal Reserve, ultimately impacting interest rates and consumer behavior. With bond yields falling and mortgage rates slightly lowering, the balance between managing inflation and supporting economic growth becomes increasingly delicate.