Trump’s Tariffs Could Stall Growth Before 2026 Surge | Alfonso Peccatiello
Episode publishedPodcast: Forward GuidanceForward Guidance
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In a world where you have to price a good probability that The US will run the economy hot, you buy high beta assets linked to nominal growth, but then there is a shorter timeframe, let's say the next three to four months, where you might say, wait a second, there is no new fiscal impulse coming through. The OBDD really kicks in in the first quarter of next year. Now if Trump only does tariffs and the tariffs are borne by US consumers or corporates and the OBDD is the only fiscal thing he will do, what will happen at that point is that the acceleration of money creation in The US will actually
This episode is brought to you by Vanek Semiconductor ETFs. You'll hear more about the Vanek Semiconductor ETF, ticker SMH, the largest semiconductor ETF, and its newer VanEck Fabless Semiconductor ETF, ticker SMHX, later in the show. Blockworks Digital Asset Summit, crypto's premier institutional event, is back in London this October. You've got top speakers from BlackRock, Circle, Coinbase, the UK Parliament, and Athena all under one roof. I'll be there as well hosting a live forward guidance episode with Quinn and a few others. So if you wanna see us record in the flesh or meet some of the
It's a pleasure to be here. I listen to every episode. And by the way, like, have you been Meatly or something? You know, you're spending of the hedge fund and my surname. It's even harder than the hedge fund, I would say. Pretty spotless, man.
Thanks, man. Super excited. Appreciate listening to the show. Always listening to your your show with Brent Donnelly. Always a good one to catch on Friday as well. So, yeah, mate, should be fun. Lots to talk about. I want to frame this conversation by what I've been thinking about, which is, okay, over the past twelve months we've had, or even twenty four months, we've had this very powerful fiscal impulse and then this this Federal Reserve that's mostly been on pause other than a couple rate cuts last September. It feels like to figure out macro right now is trying to figure out these two for
When we have to think about monetary policy, we have to think about who sets it, that's the 12 voters at the FOMC. Right? I think the Lisa Cook episode is interesting because it basically opens the stage to Trump having control of the 12 and how this is going to play out is that Cook gets off, so then Trump has four loyal members at the FOMC at that point, at the Board of Governors, I should say, at that point. So that's Miran, Waller, Baumann and the replacement of Cook, assuming that the Cook filing goes through, but I guess it does. And then at that point, by February 2026, he can have a ma
Do you think the market has effectively discounted what seems to be happening with the Fed right now? Like you mentioned that it's priced towards 3% ish, which, okay, that's like, I don't know, 100 bps of cuts over the next little while, But then, you know, you hear, it feels like every week Trump decides to take off another percentage point off like where he thinks that we should be. So, I mean, when you look at what the curve is priced and when you look at what inflation expectations are doing, breakevens in that part of the market as well, do you see the market as accurately pricing what co
I think in fixed income terms, when I look at the distribution of probabilities, there is a very strong body of the distribution that says we're going to go to around 3%, which is the most likely outcome. The market therefore really doesn't price a lot of tail risks well below 3%, which also, because Felix, that really coincides with recessionary risks.
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