Market Analysis: Ignoring Trump’s Latest Tariff Threats Poses Risks

According to a report by Jinse Finance, Brent Schutte, Chief Investment Officer at Northwestern Mutual, stated that both the Federal Reserve and the market remain uncertain about the economic outlook, with internal disagreements within the Fed becoming increasingly pronounced. While dissenting voices alone do not determine policy direction, they do reflect broader uncertainty within the central bank. A key variable is Trump’s recent announcement of a 25% tariff on India. Schutte noted that the market is currently largely ignoring this latest tariff threat, believing the White House may reverse course if necessary. However, he warned that such a bet could be risky, especially if companies begin passing tariff costs on to consumers. Nevertheless, even before the full impact of the tariffs is felt, actual private domestic purchasing expenditures in the U.S. have already slowed significantly. Once companies raise prices, the Federal Reserve will soon face a difficult trade-off between rising inflation and a slowing economy.