BREAKING: Wall Street firms are generally advising clients they should prepare for the Trump tariffs to bring the inflation rate up to 4% and for a slowdown the economy by the summer. I'm hearing this from multiple high-end wealth managers inside the big firms. Im not saying I agree with this; there is countervailing evidence ie lower gas prices and some food item ie eggs; consumer appears strong in today's GDP print and we are still a consumer economy. But the across the board nature of the tariffs are still being filtered into business plans, these people say. The uncertainty of tariff direction and impact given all the exceptions and clauses, plus the potential for a long battle with China is forcing businesses to prepare for the worse, they add. Today's GDP print is not pricing in the tariffs impact except on imports, which depressed GDP but should be seen as an anomaly. As I have reported in the past, the next 6 to 8 weeks will be crucial in determining how big of a bite the tariffs have taken out of the economy, how much they are adding the price pressures etc. Developing https://x.com/CGasparino/status/1917634840645755316
U.S. retailers will soon jack up prices on the inventory they stocked up on pre-tariffs. They will need to make higher margins on their existing inventory to make up for the plunge in sales that will result once they must price in the full impact of tariffs on future imports. https://x.com/PeterSchiff/status/1917603541788541045
..after all the sh*tshow, this is now just 10% not reflecting a sense of confidence. I know he said higher than 10%. But if it would be 25%, he would say higher than 20% or 25%.
..how do you entice FDI with just 10% tariff if as what Trump says, if you want to avoid the tariffs, come and invest in America.
..I think this is why the US market is going higher and Gold going lower- the market has worked out that Trump team would have to eventually settle for a moderate tariff rise that is not going to pose a large threat to the US economy....or at least that is the imputed hope. A 10% rise would be acceptable to all countries I should think and would provide the minimum face-saving exit for the President's failed attempt to get other nations to pay for the unfairness.
..at the end of it, I think it would be a net loss to the US because higher marginal tariffs of 10% magnitude would largely be offset by a reduction of US product purchases by China and the EU and Canada, while US also loses from lower inbound tourism to the tune of tens of billions and its impact on the hospitality industry, in addition to longer term loss of credibility in international finance and redemption and pullout of foreign funds from US stock market and real estate, plus international boycotts of US made products. Many of its losses that are not quantified are not obviously visible to the public unless they speak to the affected sectors.
...many of these negative effects are only just making their way through the economy over the past month and would surely be reflected in US GDP in the coming quarter.
