Tariffs And Inflation Expectations

2025-07-19 06:30:00 ET

Here are some things I think I am thinking about this weekend:

The Teeny Tiny Tariffs

Back in April, I laid out 3 likely scenarios for how the tariffs would play out. The most likely scenario I laid out, at 70% odds, was one where Trump had to backpedal on most of the tariffs and the economy basically reverted back to where it was before, but with minor damage. The key to this was the deal with China because we had a near trade embargo in place until that happened. Thankfully, it was short-lived. I’d say my scenario 2 has more or less played out, and the best evidence of this is that there has been very little meaningful change from the actual tariff implementations so far....

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