“The Big Short” Investor: When Trump embraces new tariffs, the economy is experiencing a “stagflation period”

Danny Moses, founder of Moses Venture, became famous for his book-turned-movie, Big Short, but warned that despite some strong economic indicators facing tariff uncertainty, there are already signs of stagflation above us.

“There are so many moving parts for now, so it’s really hard to decipher where you identify,” Moses said. luck. “Everyone can find a data point that says it’s inflation, and someone can find a data point that doesn’t. So it’s just hard. But the final line. (Economy) goes through a stag time? That’s right to me.”

President Donald Trump announced on Friday New round of cleaning feesthe administration, which includes a 39% tax on Swiss exports and a 35% tax on Canadian exports to the US, has extended trade deadlines to other countries, including Mexico, America’s largest trading partner. The logic behind tariffs is slightly different from previous rounds where Trump advocates the need for taxation as a means to eliminate Trade deficit. For example, the US has been holding a trade surplus with Brazil for about 10 years. Instead, Trump is imposing sudden tariffs on Brazil Political reasonsand prosecutors of former Brazilian president Jea Bolsonaro, allies accused of plotting a coup after the loss of the presidential election.

market Immered After the announcement – as well as Weaker than expected job reports– Following a week of rallying strong income and a terrifying trade war. But Moses told investors that the latest tariffs once again sparked anxiety about the future of the economy, “I’m a little more worried about the unpredictability of what will come out.”

“No one knows how this will pan out because this type of unthinkable tariff is unprecedented,” Moses said.

Where is the stagflation?

Stag fear, or stagnation in economic growth that coincides with inflation, have It’s relaxedespecially following Wednesday’s GDP data. Recovers to US economic growth In the second quarter of the year. This followed a Negative first quarter GDP estimates This was primarily the result of the timing of trade chaos, forcing companies to stockpile items before pricing for consumers who purchase that inventory. But ultimately, second quarter growth undoubted the contraction in the first quarter, and economic growth ultimately slowed the first half of the year.

White House spokesman Kush Desai said luck The statement “results in growth and recovery in “cooling inflation” and “suggesting stagflation” suggests it is the latest buzzword for Panican (SIC) paranoia. ”

Moses said the economy has not yet seen the full impact of tariffs. Federal Reserve Chairman Jerome Powell stabilized interest rates More information is needed to provide rate reductions this week.

“Higher tariffs are beginning to be more clearly shown for the prices of some commodities, but we have not yet seen the overall impact on economic activity and inflation,” Powell told reporters following the Fed meeting on Wednesday. “A reasonable basic case is that the impact on inflation can be short-lived. It rejects one-time changes in price levels. However, it also can be a more sustainable inflation effect, which is the risk that it will be assessed and managed.”

Not only is there already a high chance that inflation will increase I’ve started doing italthough modestly, Moses said, but businesses will continue to face the effects of tariffs. apple The latest giant felt burns from tariffs reporting strong income on Friday, A $1.1 billion hit From taxation. According to Moses, businesses continue to calculate the impact of tariffs, so they may choose to grow both margins and compromise, increasing the price of their products.

“Pick the poison,” Moses said. “It’s either going to hit the margins of the company and revenues will either fall. That means the market is expensive. Or it will be handed over to the consumer and it will be inflation. I think it will be a combination of both.”