Latest news with #Sløk
New York Post
4 days ago
- Business
- New York Post
Wall Street economist who ripped Trump admits prez may have ‘outsmarted all of us' on tariffs
A prominent Wall Street economist who had slammed President Trump's tariffs earlier this year now says that the president may have 'outsmarted all of us' with his controversial trade policies. Torsten Sløk, chief economist at investment giant Apollo Global Management, said that while the uncertainty surrounding trade policy has already started to weigh on the economy, Trump could lower tariffs on most of the US trading partners while using the levies to boost federal revenue. Sløk suggested in a recently posted analysis that the administration's approach may be more strategic than previously thought. The optimistic outlook stands in stark contrast to his earlier position. 3 President Trump may have 'outsmarted all of us' with his tariff policies, according to a senior Wall Street analyst. AP In April, Sløk warned that Trump's tariffs could trigger a recession by summer, particularly harming American small businesses and potentially halting the flow of goods from China to the US, leading to layoffs and a broader economic slowdown. This time around, Sløk suggested that one potential move could be to keep 30% tariffs on Chinese imports while imposing 10% tariffs on all other countries — offering them a 12-month window to reduce non-tariff barriers and liberalize trade access. 'Extending the deadline one year would give countries and US domestic businesses time to adjust to the new world with permanently higher tariffs,' Sløk wrote. 'It would also result in an immediate decline in uncertainty, which would be positive for business planning, employment, and financial markets.' Beyond calming volatile markets, Sløk notes that such a move could deliver a sizable boost to US government revenue. He estimates the plan could generate $400 billion in annual tax revenue — a figure that could help offset budget deficits without raising domestic taxes. 3 Torsten Sløk, chief economist at investment giant Apollo Global Management, suggested there may be a method to Trump's madness. Bloomberg via Getty Images 'This would seem like a victory for the world and yet would produce $400 billion of annual revenue for US taxpayers,' he wrote. 'Trade partners will be happy with only 10% tariffs and US tax revenue will go up. Maybe the administration has outsmarted all of us.' Kush Desai, a White House spokesperson, told The Post via email: 'President Trump was right all along? Many such cases!' Trump announced on Friday that the US has signed a new trade agreement with China. The full text of the agreement has not been made public, and details remain limited. 3 Trump said on Friday that the US and China have signed an agreement on trade — though details were scant. AFP via Getty Images At the same time, the Trump administration faces a looming July deadline as its 90-day pause on tariffs with several global trading partners nears expiration. Talks are ongoing with 18 nations, including the European Union, Japan, India, Vietnam and Malaysia. Some progress has been reported, such as a framework deal with the UK and early-stage agreements with Vietnam and India, though most deals are not finalized. If negotiations fall through, the US is prepared to reimpose or raise tariffs. Analysts are skeptical that meaningful deals can be completed on such an aggressive timeline, warning that most trade pacts typically require years of negotiation. With uncertainty mounting, the administration may push discussions beyond the July cutoff — possibly into early September — while attempting to stabilize global trade relationships.
Economic Times
5 days ago
- Business
- Economic Times
Top economist warns: US faces a crisis worse than recession — here's what could be coming
The US economy may be headed for something more dangerous than a typical downturn, and a top Wall Street economist has also shared his prediction for the US economy in its current condition, as per a report. Apollo Global Management chief economist Torsten Sløk has warned that America is on the verge of a critical inflection point for stagflation, a situation where inflation remains elevated while growth decelerates — something that's particularly challenging to address, according to a Business Insider report. It's different from a typical recession, as stagflation renders the Federal Reserve powerless, making it more difficult to reduce interest rates without further exacerbating inflation, as per the report. Sløk pointed out in a white paper that this economic condition has largely been triggered by US president Donald Trump's tariffs, reported Business explained that, "Tariff hikes are typically stagflationary shocks — they simultaneously increase the probability of an economic slowdown while putting upward pressure on prices," as quoted in the report. The economist also added that consensus forecasts on Wall Street for economic growth have drifted lower this year, while inflation forecasts have edged higher, as reported by Busienss Insider. ALSO READ: Is Iran's enriched uranium hidden on Pickaxe mountain? The secret site that may have fooled the US Here's what he's forecasting for in the coming months and why it's important for anticipates the economy to slow sharply, and this year the GDP growth may plummet to as low as 1.2%, which is less than half the record 3.1% expansion that occurred in the third quarter of 2024, according to the report. The Bureau of Economic Analysis has estimated that the American economy has already contracted by 0.3% in the first quarter of 2025, which is the first decline since 2022, as reported by Business now forecasts inflation to be around 3% by the end of 2025, which is well above the company's previous estimate of 2.4%, prior to Trump's tariffs announcement in April, as per the report. ALSO READ: He leaked B-2 bomber secrets to a US ally and an arch enemy - where Noshir Gowadia is now will shock you The labor market is expected to slow down over time for at least the next 18 months, according to Business Insider. Apollo has projected that unemployment could increase from 4.2% currently to 4.4% in 2025 and further jump up to 5% or higher in 2026, as per the has projected that the possibility of a recession over the next 12 months in the United States is at 25%, as reported by Business Insider. Sløk pointed out that before Trump's tariffs, the company was not even anticipating a recession at all this year, according to the even warned that now there is still a risk that the US economy could enter a recession as soon as this summer, referring to his "voluntary trade reset recession" thesis he first floated as tariffs swung into effect earlier this year, as reported by Business explanation is that the US economy will enter a recession this summer due to tariffs because of shipments to US ports, and trucking demand will slow down, which will lead to empty shelves and lower sales for firms, as reported by Business causing this potential stagflation?According to Sløk, it's mostly being driven by President Donald Trump's tariffs, which make imported goods more expensive and can hurt businesses. How bad could the US economy get? Sløk thinks GDP growth, basically how much the economy grows, could be cut in half this year, dropping to just 1.2%.
Time of India
5 days ago
- Business
- Time of India
Top economist warns: US faces a crisis worse than recession — here's what could be coming
The US economy may be headed for something more dangerous than a typical downturn, and a top Wall Street economist has also shared his prediction for the US economy in its current condition, as per a report. Apollo Global Management chief economist Torsten Sløk has warned that America is on the verge of a critical inflection point for stagflation, a situation where inflation remains elevated while growth decelerates — something that's particularly challenging to address, according to a Business Insider report. It's different from a typical recession, as stagflation renders the Federal Reserve powerless, making it more difficult to reduce interest rates without further exacerbating inflation, as per the report. Sløk pointed out in a white paper that this economic condition has largely been triggered by US president Donald Trump's tariffs, reported Business Insider. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like New Delivery Jobs in Severnobacki Okrug [Join] Delivery Jobs | Search Ads Search Now Undo He explained that, "Tariff hikes are typically stagflationary shocks — they simultaneously increase the probability of an economic slowdown while putting upward pressure on prices," as quoted in the report. The economist also added that consensus forecasts on Wall Street for economic growth have drifted lower this year, while inflation forecasts have edged higher, as reported by Busienss Insider. ALSO READ: Is Iran's enriched uranium hidden on Pickaxe mountain? The secret site that may have fooled the US Live Events Here's what he's forecasting for in the coming months and why it's important for you. 1. GDP growth may be halved Sløk anticipates the economy to slow sharply, and this year the GDP growth may plummet to as low as 1.2%, which is less than half the record 3.1% expansion that occurred in the third quarter of 2024, according to the report. The Bureau of Economic Analysis has estimated that the American economy has already contracted by 0.3% in the first quarter of 2025, which is the first decline since 2022, as reported by Business Insider. 2. Inflation is likely to stay high Apollo now forecasts inflation to be around 3% by the end of 2025, which is well above the company's previous estimate of 2.4%, prior to Trump's tariffs announcement in April, as per the report. ALSO READ: He leaked B-2 bomber secrets to a US ally and an arch enemy - where Noshir Gowadia is now will shock you 3. Unemployment will continue to increase The labor market is expected to slow down over time for at least the next 18 months, according to Business Insider. Apollo has projected that unemployment could increase from 4.2% currently to 4.4% in 2025 and further jump up to 5% or higher in 2026, as per the report. 4. A recession is still in the cards Apollo has projected that the possibility of a recession over the next 12 months in the United States is at 25%, as reported by Business Insider. Sløk pointed out that before Trump's tariffs, the company was not even anticipating a recession at all this year, according to the report. Sløk even warned that now there is still a risk that the US economy could enter a recession as soon as this summer, referring to his "voluntary trade reset recession" thesis he first floated as tariffs swung into effect earlier this year, as reported by Business Insider. His explanation is that the US economy will enter a recession this summer due to tariffs because of shipments to US ports, and trucking demand will slow down, which will lead to empty shelves and lower sales for firms, as reported by Business Insider. FAQs What's causing this potential stagflation? According to Sløk, it's mostly being driven by President Donald Trump's tariffs, which make imported goods more expensive and can hurt businesses. How bad could the US economy get? Sløk thinks GDP growth, basically how much the economy grows, could be cut in half this year, dropping to just 1.2%.
Yahoo
16-06-2025
- Business
- Yahoo
Economy to slow, inflation to persist above Fed 2% goal: NABE survey
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. The U.S. economy, jarred by the highest tariffs since the 1930s, will likely slow to 1.3% growth this year as inflation persists above the Federal Reserve's 2% target, the National Association for Business Economics said Monday, citing a survey of forecasters. Almost four-out-of-five economists (78%) consider import duties the biggest risk to the economy during the next 12 months, followed by 7% who deem geopolitical conflicts as the top risk, NABE said. Nearly half of panelists (49%) expect tariffs to push up inflation this year by between 0.5 and 0.99 percentage point, while 15% see an increase between 1 point and 2 points. 'Most of the panelists look for sluggish economic growth and elevated inflation to persist, at least for this year, and for inflation even to remain a little bit above target next year,' Nationwide Mutual Chief Economist Kathy Bostjancic said during an NABE webcast. The impact on oil prices from war between Iran and Israel also threatens to bring about below-trend economic growth and rising price pressures, or 'stagflation,' according to Torsten Sløk, chief economist at Apollo Global Management. A sustained $10 increase in oil prices would stoke inflation by 0.4% and erode gross domestic product by 0.4%, Sløk said in a client note Saturday, citing a Fed model. The price of West Texas Intermediate crude oil surged to $77.68 on Thursday during the outbreak of Iran-Israel hostilities before declining to $71.26 on Monday. 'Higher oil prices exacerbate the ongoing stagflation shock stemming from tariffs and immigration restrictions,' Sløk said, referring to how plans by President Donald Trump to deport undocumented workers would reduce the labor supply. Higher long-term interest rates and the resumption of student loan payments also pose headwinds to GDP growth but, along with tariffs and more expensive oil, will probably not cause a recession, Sløk said in a note Monday. Economists downgraded their median forecast for economic growth to 1.3% this year from 1.9% prior to Trump's April 2 announcement of tariffs against virtually all U.S. trading partners, according to NABE. 'Downgrades to consumer spending, residential investment, government consumption expenditures and a larger trade deficit (net exports) drove the downward revision of the median forecasts,' NABE said. The economists' projection is gloomier than recent estimates by the World Bank and OECD, which forecast U.S. GDP growth this year of 1.4% and 1.6%, respectively. 'The rise in trade barriers, heightened uncertainty and the spike in financial market volatility are set to weigh on private consumption, international trade and investment,' the World Bank said in a June 10 report. The personal consumption expenditures price index, minus volatile food and energy prices, will likely accelerate this year to 3.3% on a Q4-to-Q4 basis, a 0.5 percentage point increase compared with 2024, the association said, citing the median estimate of 42 economists. So-called core PCE is the Fed's preferred gauge of inflation. 'Higher inflation says the Fed should be hiking,' Sløk said. 'Lower GDP growth says the Fed should be cutting.' Fed officials on Tuesday will begin a two-day meeting to discuss the economy and monetary policy. Will policymakers 'put more weight on the upward pressure on inflation or more weight on the coming slowdown in growth?' Sløk said. Unemployment will likely average 4.3% this year and rise to 4.7% in 2026, the highest level since 2021, the NABE said. As the economy cools, the Fed will probably trim the benchmark interest rate by 0.5 percentage point this year from its current range between 4.25% and 4.5%, and by a half point next year, according to the NABE panel of economists. The quarter-point cuts will likely extend from the third quarter through Q2 next year, NABE said, citing the survey.
USA Today
08-06-2025
- Business
- USA Today
Half of the bond market is US Treasurys. Why it's 'not healthy.'
Half of the bond market is US Treasurys. Why it's 'not healthy.' Show Caption Hide Caption Trump summons Fed's Powell to tell him he's wrong on rates U.S. President Donald Trump called Federal Reserve Chair Jerome Powell to the White House on May 29 for their first face-to-face meeting since he took office in January and told the central bank chief he was making a "mistake" by not lowering interest rates. Over the past 12 months, about half of all debt in the U.S. bond market has been Treasurys – bonds and notes issued by the federal government. That's according to a June 8 research note from Torsten Sløk, the chief economist for money manager Apollo. 'This is not healthy,' Sløk wrote. 'Half of credit issued in the economy should not be going to the government.' As USA TODAY has previously reported, the growing U.S. budget deficit has caught the attention of investors in the bond market. The deficit is the consequence of revenue – taxes, mostly – not keeping up with spending. As it increases, the government issues more debt to plug the hole, and as supply rises, the government needs to pay more to attract demand from investors. President Donald Trump's proposed tax bill would exacerbate that dynamic, swelling the deficit by an estimated $2.4 trillion over the next decade, according to the nonpartisan Congressional Budget Office. More: Treasury bond yields are surging as the Trump tax bill progresses. Here's why it matters. Since all kinds of credit products, such as mortgages, are linked to the important U.S. Treasury market, those higher borrowing costs ripple through the economy. Sløk has written previously about the concerns over the power dynamic between the government and bond investors. Some analysts are concerned that investors may become what's sometimes called 'bond vigilantes' – demanding certain fiscal conditions as a condition of buying a government's debt. Overseas investors own nearly one-third of outstanding Treasury debt. Sløk's June 8 analysis is a reminder that the Treasury's mounting debt has many ripple effects. 'The consequence is that investors need to allocate more and more dollars to finance the government rather than financing growth in the economy through loans to firms and consumers,' Sløk wrote. Read next: The White House's tax bill will consider SALT (again). What could that mean for you?
