Bloomberg Talks
Apollo Chief Economist Torsten Slok Talks Tariff Reversal
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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Quick takeaways
- The reversal of tariffs is expected to increase consumer prices, impacting corporate strategies amid a competitive landscape and inflation concerns.
- A recent downturn in economic sentiment, fueled by market volatility and consumer uncertainty, has heightened recession risks to approximately 50%.
Deep dives
Impact of Tariffs on Inflation and Corporate Behavior
Tariffs on imported goods, particularly from China, are expected to lead to increased prices for consumers. Companies face decisions about whether to sell existing inventory at previous prices or to raise prices immediately, influenced by their competitive landscape and sector. The situation is precarious, as higher prices are likely to emerge over time, contributing to inflation pressures. As businesses navigate these challenges, there remains uncertainty regarding how rapidly these price changes will materialize and whether consumers will bear these costs or if companies will absorb them instead.
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