Here's what Trump's tariffs could mean for the economy.
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00:00So, right now, we would advise investors that now is not the time to make major moves into
00:04your portfolio other than raising safe haven plays, like the dollar, the Japanese yen,
00:10you know, long-dated U.S. treasuries, those types of moves that would behave well in a
00:14risk-off environment, at least in the short term.
00:16The lessons from past tariff implementations, we really have to go back a long time because
00:21if the full tariffs that were announced yesterday get implemented, the average effective tariff
00:27rate in the United States is going to be around 25%, so we haven't seen those levels
00:30in decades.
00:31So, you know, previous tariffs were, you know, I mean, that led us into the Great Depression,
00:36right?
00:37So, we need to make sure that we are positioned for potentially more stagflationary scenarios.
00:41Now, if you think that they're negotiating tactics and that sort of we're at a maximalist
00:46position here because Trump staked out his, you know, asked for the moon right off the
00:51bat, we could actually see a deceleration in tariff-related or trade war-related uncertainty
00:57going forward.
00:58I suspect that 6 to 12 months from now, investors are going to be feeling better about the markets
01:03than they are today.
01:04I'll tell you, before yesterday's announcement, we had recession risks in the United States
01:09pegged somewhere around 35%.
01:12After yesterday's announcement, they're closer to 50%.
01:14In fact, I think there's a good chance that the Q1 GDP number could be close to zero,
01:19perhaps even slightly negative.
01:21So, I think, you know, recession risks have certainly increased.
01:24I think we're going to see about a, you know, 1.5% to 2% increase in the overall inflation
01:29rate and a hit to consumption spending, even to the point where real consumption spending
01:34in the United States might turn negative sometime in the, you know, second to third quarter.