Bloomberg Talks Apollo Chief Economist Torsten Slok Talks Tariff Reversal
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Apr 10, 2025 Torsten Slok dives into the impact of tariff reversals on the US economy, highlighting inflation dynamics and the Federal Reserve's potential responses. The discussion explores how businesses are rethinking pricing strategies amidst these challenges. Additionally, the podcast analyzes the effects of declining energy prices on consumer sentiment and the looming risks of stagflation. Listeners gain insights into navigating the current economic uncertainties and the possibility of a recession.
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Economic Outlook and Inflation
- The US labor market remains reasonably strong, and recent inflation data is better than expected.
- However, potential tariffs could still significantly increase inflation in the next 12 months.
Companies' Response to Tariffs
- Companies may respond to tariffs by raising prices on existing inventory or selling it at old prices.
- The impact and speed of price increases will vary across companies and sectors, but higher prices are inevitable.
Downside Risks and Consumer Sentiment
- Lower energy prices give consumers more disposable income and offset producer costs.
- Negative sentiment, a potential wealth effect from market declines, and trade war retaliation pose significant downside risks.