RiskReversal Pod Fed Stays Steady & The "Sell America" Trade with Peter Boockvar
Jun 19, 2025
Peter Boockvar, CIO at Bleakley Financial Group, shares his keen insights on monetary policy and market reactions. He and the hosts dissect recent comments from Fed Chair Jerome Powell, exploring the complexities of economic forecasts influenced by tariffs and inflation. The discussion highlights potential implications for GDP, housing, and the labor market, emphasizing the vital role of unbiased risk management. Boockvar also challenges the effectiveness of the Federal Reserve's interventions against market dynamics, questioning the balance of authority in interest rate setting.
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Fed's Patience on Tariffs
- The market anticipated dovish signals from Fed Chair Powell but was disappointed as he emphasized patience regarding tariffs impact.
- Yields and stocks reacted by pulling back from earlier gains, reflecting uncertainty about future Fed policy.
Tariffs' Complex Economic Impact
- Tariffs are causing a simultaneous rise in inflation and a cut in economic growth, complicating the Fed's response.
- The potential long-term effects on supply chains and housing rents suggest tariffs are more than a one-time price increase.
Mixed Economy and Fed Outlook
- The U.S. economy shows mixed performance: solid growth in some areas but weakness in housing, manufacturing, and middle-income spending.
- Fed likely to cut rates in September and December as labor market softens and GDP growth slows due to tariffs.