Latest news with #JuliaCoronado
Business Insider
15-06-2025
- Business
- Business Insider
The Scared Stiff Economy
There's no such thing as the perfect time for a big decision. But when I reached out to Julia Coronado, the president of the economics consulting firm MacroPolicy Perspectives, to ask whether it's a good moment to take a significant financial risk, at least in the relative sense, her succinct email reply was telling: "Lol, short answer is no!" Given how complicated major transactions can be, there are plenty of caveats and counterexamples. On the whole, however, it is a particularly bad time for many major moves financially. Given everything that's going on right now, economists and personal finance gurus say that if you're treading water or feeling extra uneasy, you're not alone. " Uncertainty" is the word of the moment. America's tariff policies have shifted dozens of times since President Donald Trump took office. The stock market has been all over the place. The volatility emanating from the White House on immigration, government spending, and the federal workforce is palpable. There are rumblings of a recession and a return of high inflation. Consumer sentiment is in the basement. Across the economy, people feel like they're stuck in place. It's not a great time to change jobs, given the cooling labor market. The housing market isn't terrible — there's a growing amount of inventory out there — but if you're looking to buy now, you're probably lamenting having missed the dirt-cheap mortgage rates of a few years back. People thinking about retiring soon are doing some rethinking, given the current economic and financial market precarity. "It's not that when there's uncertainty or more uncertainty that people stop and don't act, don't make the big purchase, don't make the investment," says Claudia Sahm, the chief economist at New Century Advisors, an investment management firm. "It's often that the bar is higher." The issue at the moment is that while it may be appealing to adopt a wait-and-see approach, later is not synonymous with better. That's the calculation many Americans are facing now: Do I hold out on making a move now while things settle down, or do I take the risk that things will take a turn for the worse? "All we can do now is kind of read tea leaves on the future," says Chris Woods, a financial advisor who founded Silvis Financial. There's that old Wayne Gretzky quote about skating "to where the puck is going to be, not where it has been." The issue is that it's hard to guess where things are headed. When you're building up to a major financial leap, you typically sit on it until some level of certainty hits. That's especially true in scenarios where there are serious penalties for changing your mind. I mean, sure, you can offload that new car six months later, but you'd probably rather not. Jonathan Parker, a finance professor at MIT, tells me that a big spike in uncertainty will cause people to delay major spending such as upgrading to a new car, noting that "you might want that money for other purposes." When people make a big financial decision, such as buying a house, investing, or retiring, they want some level of buffer. They leave space for the possibility that some unexpected need will pop up — a medical emergency, an unexpected broken-down car or leaky roof, a lost job, a death in the family. Ideally, consumers don't want to just barely make their mortgage, wind up suddenly tapping the money they stowed away in their stock portfolio, or skimp on their day-to-day needs in retirement. When they take leaps, they want to leave a little side pot available to avoid an unforeseen circumstance. There's only so much a person can control — doing the best job possible at work doesn't insulate you from layoffs or guarantee your pay will increase with prices. Uncertainty makes that buffer harder to calculate and feel confident about having in the future. "In a time of great uncertainty, it's probably not the time you want to stretch with a purchase," Sahm says. This uncertainty may be headache-inducing for individuals trying to make up their minds, but what it might mean for the broader economy is tricky. Consumer spending is America's economic engine — personal expenditures account for about two-thirds of GDP. Ironically, people being worried is, in part, supporting the economy. When consumers are concerned about prices going up, they may pull forward big purchases to get them out of the way now before they get more expensive later. If you're nervous about your washing machine or car going kaput soon or are just looking to upgrade, it may feel prudent to replace them sooner rather than later in case prices go up. This year, consumer spending has jumped because of people trying to get ahead of tariffs. Crummy feelings about the future of the economy have actually been a good thing, spending-wise. "This is one thing that has helped consumer spending stay up while sentiment has really cratered," says Scott Baker, an associate finance professor at Northwestern University's Kellogg School of Management. At the same time, once people have made these anticipatory purchases or start to batten down the hatches, they could bring down the economy with them. If someone decides to put off renovating their kitchen, it means the contractor, the workers, and the store selling the materials miss out on money. "Just the fact that all of this is happening generates a wave of uncertainty," Parker says. "It's a significant drag on the economy, and it's not clear how big, but it certainly is a drag." Anyone who says they know what will happen next is lying. To be sure, there are some areas where sitting on your hands is usually the way to go, such as investing. When the going gets tough in the stock market, one of the worst things people can do is panic and cash out at the bottom. If someone had done that, say, in the wake of Trump's "Liberation Day," they'd probably regret it now. "Markets fluctuate all the time, they will go up and down," says Siavash Radpour, the associate director of the Retirement Equity Lab at The New School's Schwartz Center for Economic Policy Analysis. "Not doing anything is often a good policy for people who don't know what's going on." My colleagues at Business Insider recently did a series of stories attempting to answer whether it's a good time to make big life decisions. They looked at starting a business (the answer was yes), buying a home (if you must, but maybe rent), changing jobs (no), investing in stocks (go for it, within reason), buying a new car (hop to it), and retiring (hold off). The advice in the stories is all helpful and enlightening, but it can also go only so far. Every decision in life involves risks, and the truest answer to "Should I do X, Y, Z?" is, "It depends!" There's no denying we're in a time of heightened uncertainty. Anyone who says they know what will happen next is lying. And it really feels like things could break in any direction. While the safest advice is probably that you should snap up that new car before tariffs push up prices by thousands of dollars, Trump could declare the tariff thing over tomorrow, and all of a sudden you've overpaid for no reason. "The market this year has been driven less by fundamentals and just more by the different news we're getting from week to week on what's going on," Woods says. Maybe you do hold off on buying a house and come to regret it five years from now when prices are even higher. Or, you don't retire, and you miss out on time with your grandkids, or you're so risk-averse about jumping ship from your company that you miss out on your dream job. Those decisions are harder to make now with more factors in play. It's not just whether a recession is coming, but also what the AI revolution means for the structural future of the labor market. The question for retirees isn't just whether they've saved enough; it's also what might happen with public assistance programs they'd long planned around. "There is the risk of what's going to happen to Medicaid, what's going to happen to Social Security," Radpour says. "Health expenses are really scary in retirement." Starting a new business is always risky — statistically speaking, half of new businesses fail in five years. Loans for starting said business are more expensive and harder to come by. While it may be a decent time for a startup, no plan is foolproof. Many people who start a company during downturns and turmoil are doing so because they've lost their job or someone in their household has, not because they're jazzed about the future. "The jump is made for them, in some sense," Baker says. Still, if you see a market opportunity and want to make the jump, the idea that economy could get bad shouldn't preclude taking action. Thinking through all of the ambiguity and confusion isn't fun. Financial risks are always scary, whether big or small. Now it feels like the anxiety is extra heightened, given the context. For many people, it's going to feel like they're damned if they do, damned if they don't.
Bloomberg
05-06-2025
- Business
- Bloomberg
Bloomberg Surveillance: Jobs and Markets (Podcast
Watch Tom and Paul LIVE every day on YouTube: Bloomberg Surveillance hosted by Tom Keene & Paul Sweeney June 5th, 2025 Featuring: 1) Neil Dutta, Head: US Economic Research at Renaissance Macro, joins for an extended discussion on labor market strength and whether we are on the cusp of a breaking of US labor. Friday's jobs report is expected to show slowed growth in nonfarm payrolls and a steady unemployment rate, with traders awaiting fresh data on the US economy. 2) Vishy Tirupattur, Chief Fixed Income Strategist at Morgan Stanley, joins to discuss bond market warnings and reacts to jobless claims. A series of poorly received sovereign bond auctions worldwide has raised questions about investors' willingness to fund government spending plans. Recent auctions in Japan, Australia, and South Korea have shown weak demand, and investors are demanding more compensation to hold long-dated bonds due to growing anxiety about fiscal deficits. 3) Julia Coronado, President and founder of Macropolicy Perspectives, joins to talk about the June FOMC meeting and whether there'll be more Fed cuts than is being priced in. A trend of higher global yields is a warning sign from investors that governments cannot keep borrowing at the pace they did when interest rates were close to zero. 4) Neale Richmond, Ireland's Minister of State for Diaspora and International Development, on how the EU is negotiating with the US on tariffs. It comes as the EU's power to impose retaliatory tariffs on US goods and services received a legal boost from an adviser to the EU's top court. 5) Romi Savova, CEO at PensionBee, discusses bringing efficiency to the retirement systems in the US and abroad and how money managers can better position people to retire.
Bloomberg
17-03-2025
- Business
- Bloomberg
US Trade Wars Tip World to Slower Growth, Faster Inflation
US President Donald Trump's aggressive trade policies have abruptly set the world onto a path of slower growth and higher inflation that could worsen notably if tensions escalate, the OECD said. The Paris-based club of 38 rich countries cut its outlook for most members and predicted the pace of global expansion to slow to 3.1% this year and 3% in 2026 as barriers restrain commerce and surging uncertainty holds back business investment and consumer spending. MacroPolicy Perspectives founder and president Julia Coronado explains why the US Federal Reserve faces difficult near-term decisions and how uncertainty is being reflected in various corners of the market and geopolitical landscape. Julia speaks with Tom Keene and Paul Sweeney on Bloomberg Radio. (Source: Bloomberg)
Bloomberg
17-03-2025
- Entertainment
- Bloomberg
Single Best Idea: Coronado & Balchunas
Tom Keene breaks down the Single Best Idea from the latest edition of Bloomberg Surveillance Radio. In this episode, we feature conversations with Julia Coronado & Eric Balchunas. Watch Tom and Paul LIVE every day on YouTube:
Yahoo
11-03-2025
- Business
- Yahoo
Corporate America is 'absolutely' seeing a slowdown. Here's why.
White House officials found there to be a "strong divergence" between the stock market (^DJI, ^IXIC, ^GSPC) and "animal spirits" — or the sentiments held by investors and businesses, typically attributed to the role emotions play in investing and market trends. MacroPolicy Perspectives Founder and President Julia Coronado responds to the idea of whether a slowdown in Corporate America is taking place, coming as Delta Air Lines (DAL) even cut its outlook over "macro uncertainty." Also catch Julia Coronado weigh in on February's Consumer Price Index (CPI) inflation expectations and the kind of labor market trends that could push the Federal Reserve to cut interest rates. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. Sign in to access your portfolio
