Latest news with #TorstenSløk
The Independent
a day ago
- Business
- The Independent
Is Trump a genius? Top economist and tariff skeptic admits president may have outsmarted us all on the economy
Did President Donald Trump outfox the world with his tariff plan Maybe, according to Torsten Sløk, the chief economist at Apollo Global Management. On Saturday, Sløk published a blog post titled "Has Trump Outsmarted Everyone On Tariffs?" In it, he explains a possible scenario in which Trump keeps tariffs below his highest threatened rates just long enough to ease uncertainty and avoid the economic pains that would come with massive tariffs. 'Maybe the strategy is to maintain 30% tariffs on China and 10% tariffs on all other countries and then give all countries 12 months to lower nontariff barriers and open up their economies to trade,' he wrote. The post comes just before a 90-day pause on Trump's "reciprocal tariffs" — which triggered a huge stock selloff in April — ends in early July, Fortune reports. The pause was meant to provide the U.S. and its trade partners time to negotiate deals, though few actually materialized, at least publicly. That said, the Trump administration has been saying for weeks that they are close to reaching deals with several unnamed trade partners. Sløk theorized that by extending that deadline by another year, other countries and U.S. businesses would have more time to adjust to a "new world with permanently higher tariffs," and would ease the immediate uncertainty rocking the markets. 'This would seem like a victory for the world and yet would produce $400 billion of annual revenue for U.S. taxpayers,' he wrote. 'Trade partners will be happy with only 10% tariffs and U.S. tax revenue will go up. Maybe the administration has outsmarted all of us.' Sløk previously was a critic of Trump's tariff plan, and it does not appear that his position will change if the president continues his erratic and aggressive tariff program. But he has identified what he believes would be a way to come out on top — so long as the president is willing to play a longer game. Trump may or may not be willing to do that. He seems to have responded negatively to the TACO nickname he's been given by Wall Street — standing for Trump Always Chickens Out — and as a result may refuse to back off any of his proposed policies, even if it makes more sense to do so. Sløk warned in April that a U.S. and China trade war would cripple American small businesses, and advised that providing some sense of stability would give the Federal Reserve a better view on inflation. As it stands now everyone from heads of state to small business owners are in a wait-and-see pattern, unsure of how to proceed in the choppy economic waters Trump has created.
Daily Mail
2 days ago
- Business
- Daily Mail
Trump has 'outsmarted all of us' admits backpedaling economist who bashed President's bold plan
A world-renowned economist has changed his tune on President Donald Trump's tariffs. Torsten Sløk, a chief economist at Apollo Global Management, posted a new note admitting that his initial reaction to the policy may have been wrong. 'Maybe the administration has outsmarted all of us,' he wrote. The admission comes just months after Sløk warned the tariffs would be 'painful' and economically destabilizing. Experts speaking to warned that Americans should take his note with a grain of salt. But now, he's framing the President's policy as a clever long-game — one that invites global negotiation while increasing federal revenue. In the note, Sløk outlined a potential scenario: the White House could maintain its current tariff rates — 10 percent on most imports, 30 percent on Chinese goods — and give trade partners a year to negotiate with the White House. Extending the current 90-day pause on new tariffs, he argued, would give American companies time to plan ahead and could help stabilize markets. 'This would seem like a victory for the world and yet would produce $400 billion of annual revenue for US taxpayers,' he added. The timing is key. Trump's 90-day pause on new tariffs, announced in April, is set to expire on July 9. Without an extension, the tariffs would immediately increase, with billions of dollars worth of products suddenly incurring more taxes. But if the President extends the pause but keeps tariffs where they are, Sløk says the policy could offer clarity for companies and leverage in negotiations. Sløk's sudden, tepid support for the tariffs is an about-face. He initially criticized the import taxes, saying they threatened business stability, Wall Street's record highs, and the stability of US treasury bonds. 'The short-run effects of a trade war [are] certainly painful,' the economist told Yahoo Finance in February. And not everyone is convinced. Neil Saunders, a retail expert at GlobalData, warned that they will mostly impact American consumers. 'Tariffs, at any level, increase the cost of doing business,' he told 'If tariff rates remain at current levels, prices should only increase modestly – although these hikes will come off the back of years of pretty hefty inflation.' Torsten Sløk, initially a skeptic of Trump's tariff policies, has become more optimistic about America's financial future He added: 'The problem is, no one knows what will happen to tariffs. The policy has been erratic and remains uncertain.' Trump has also been ramping up pressure on both domestic and global fronts while trying to start negotiations with nearly every country around the world. At home, he's pushing Republicans to pass the sweeping 'Big Beautiful Bill' by July 4 — a legislative package that could outline his domestic agenda, but has drawn criticism from some of his most prominent allies. Elon Musk, the biggest donor in the 2024 Presidential election, called it a 'disgusting abomination.' At the same time, the President has escalated his rhetoric on Iran since America bombed the country's nuclear facilities. In a Sunday night post on Truth Social, he wrote: 'It's not politically correct to use the term, "Regime Change," but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn't there be a Regime change??? MIGA!!!' As the tariff deadline approaches, the biggest unknown remains whether Trump is bluffing on country-by-country negotiations — or if the higher import taxes are here to stay.
Time of India
2 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%.
Business Insider
4 days ago
- Business
- Business Insider
Middle East tensions could unleash a 2-part worst-case scenario that hits stocks, Morgan Stanley says
Tensions in the Middle East could spark a series of dire developments for the stock market, strategists at Morgan Stanley said this week. In a note to clients, the bank pointed to the conflict that's unfolded between Israel, Iran, and the US over the last 12 days, with Israel and Iran agreeing to a cease-fire on Monday. Tensions, though, contributed to a spike in oil prices in the last week. While crude is back down, a big jump higher in oil stemming from any Middle East conflict is something that could raise the risk of a recession and lead to the most pessimistic outcome for stocks, the bank said. "The bear case scenario for equities tied to the recent events in the Middle East would be that oil prices rise significantly, thereby posing a threat to the business cycle," strategists wrote. Morgan Stanley's bear-case scenario has two parts that "materially" raise the risks posed to markets, the note said. Oil prices rise at least 75% on a year-over-year basis. That implies Brent crude trading around or over the $120 per barrel range, strategists said. In order for oil prices to trade that high, it would probably require "sustained" disruption to oil supply in the Strait of Hormuz, they added, a key passage for oil exporters in the Middle East. Crude prices dropped significantly from their highs last year, and have also cooled from their recent spike after Iran's limited retaliatory strike on a US base in Qatar and the subsequent cease-fire with Israel. Brent crude, which rose as much as 14% during the 12 days of the conflict, traded around $66 a barrel on Tuesday. The international benchmark was down 20% from last year's levels. West Texas Intermediate crude, which rose as much as 10%, traded around $66 a barrel, down 18% year-over-year. The oil spike needs to occur late in the business cycle. Oil price spikes that have occurred late in the business cycle have historically led to recessions, according to Morgan Stanley's analysis. Haver Analytics/Morgan Stanley Research To be sure, while Morgan Stanley sees spiraling oil prices as highly negative for markets and the economy, such a scenario isn't analysts' base case. "Through last week, the year-over-year rate of change on crude was negative. Thus, while we're respectful of the risks, there's a long way to go on this basis," strategists wrote. The bank remains positive on stocks overall. While geopolitical events have historically sparked volatility in equities, the S&P 500 rose an average of 9% in the 12 months following major conflicts dating back to 1950, according to Morgan Stanley's analysis. Prior to the cease-fire, other Wall Street forecasters were eyeing the risk of a more dramatic oil price spike and its potential effects on the US economy. On Monday, JPMorgan analysts said they saw oil prices rising as high as $130 a barrel if conflict between Israel and Iran were to disrupt energy production in the Persian Gulf. Torsten Sløk, the chief economist at Apollo Global Management, said he saw rising oil prices contributing to stagflation, a scenario where the economy slows while inflation remains stubbornly high. "In short, higher oil prices exacerbate the ongoing stagflation shock stemming from tariffs and immigration restrictions," Sløk wrote in a June note to clients.
Yahoo
21-06-2025
- Business
- Yahoo
Top economist who previously sounded the alarm on tariffs sees a possible scenario where Trump ‘outsmarted all of us'
Torsten Sløk, chief economist at Apollo Global Management, laid out a potential scenario where President Donald Trump's tariffs are extended long enough to ease economic uncertainty while also providing a significant bump to federal revenue. That comes as the 90-day pause on Trump's 'reciprocal tariffs' is nearing an end. Businesses and consumers remain in limbo over what will happen next with President Donald Trump's tariffs, but a top economist sees a way to leave them in place and still deliver a 'victory for the world.' In a note on Saturday titled 'Has Trump Outsmarted Everyone on Tariffs?', Apollo Global Management Chief Economist Torsten Sløk laid out a scenario that keeps tariffs well below Trump's most aggressive rates long enough to ease uncertainty and avoid the economic harm that comes with it. 'Maybe the strategy is to maintain 30% tariffs on China and 10% tariffs on all other countries and then give all countries 12 months to lower non-tariff barriers and open up their economies to trade,' he speculated. That comes as the 90-day pause on Trump's 'reciprocal tariffs,' which triggered a massive selloff on global markets in April, is nearing an end early next month. The temporary reprieve was meant to give the U.S. and its trade partners time to negotiate deals. But aside from an agreement with the U.K. and another short-term deal with China to step back from prohibitively high tariffs, few others have been announced. Meanwhile, negotiations are ongoing with other top trading partners. Trump administration officials have been saying for weeks that the U.S. is close to reaching deals. On Saturday, Sløk said extending the deadline one year would give other countries and U.S. businesses more time to adjust to a 'new world with permanently higher tariffs.' An extension would also immediately reduce uncertainty, giving a boost to business planning, employment, and financial markets. 'This would seem like a victory for the world and yet would produce $400 billion of annual revenue for US taxpayers,' he added. 'Trade partners will be happy with only 10% tariffs and US tax revenue will go up. Maybe the administration has outsmarted all of us.' Sløk's speculation is notable as he previously sounded the alarm on Trump's tariffs. In April, he warned tariffs have the potential to trigger a recession by this summer. Also in April, before the U.S. and China reached a deal to temporarily halt triple-digit tariffs, he said the trade war between the two countries would pummel American small businesses. More certainty on tariffs would give the Federal Reserve a clearer view on inflation as well. For now, most policymakers are in wait-and-see mode, as tariffs are expected to have stagflationary effects. But a split has emerged. Fed Governor Christopher Waller said Friday that economic data could justify lower interest rates as early as next month, expecting only a one-off impact from tariffs. But San Francisco Fed President Mary Daly also said Friday a rate cut in the fall looks more appropriate, rather than a cut in July. Still, Sløk isn't alone in wondering whether Trump's tariffs may not be as harmful to the economy and financial markets as feared. Chris Harvey, Wells Fargo Securities' head of equity strategy, expects tariffs to settle in the 10%-12% range, low enough to have a minimal impact, and sees the S&P 500 soaring to 7,007, making him Wall Street's biggest bull. He added that it's still necessary to make progress on trade and reach deals with big economies like India, Japan and the EU. That way, markets can focus on next year, rather near-term tariff impacts. 'Then you can start to extrapolate out,' he told CNBC last month. 'Then the market starts looking through things. They start looking through any sort of economic slowdown or weakness, and then we start looking to '26 not at '25.' This story was originally featured on
