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Whatever billionaire investor and Trump convert Bill Ackman meant this week by suggesting the president's self-induced trade war would cause an "economic nuclear winter," one long-time economist refutes the bombastic call out.
"Well, I like Bill Ackman, and I think he's been very open-minded and kind of transferred over into the Trump camp," Independent Institute senior fellow and veteran economist Judy Shelton said on Yahoo Finance's Opening Bid podcast (video above; listen in below). "So he appreciates some aspects of that. I was a little disappointed to see that comment by Bill Ackman because it's kind of saying we cry uncle and that's it."
Shelton was an economic adviser on the recent Trump transition team. She was unsuccessfully nominated by Trump in his first term for a position at the Federal Reserve.
In the past, she has been critical of government bureaucracy and the power of the Federal Reserve over the economy and asset markets. She maintains a bullish view on gold's (GC=F) usefulness in the financial system.
"We had three really bad days in the market, and this is scary," Shelton said. "I don't want to suggest that I would trivialize that people feel the losses. And I would say people in their sixties who are thinking about retirement see a lot of their nest egg draining away, and they have a right to be concerned."
"But I don't think that the tariff program should be withdrawn," she added. "Like, oh, never mind. I think that perhaps it could have been crafted more effectively because there's too much uncertainty. I think the goals had to be clarified. Is it a money generator or is it a way to give domestic productivity a chance? So maybe maybe we'll get some of that. Maybe it can be revamped somewhat."
Markets have been tossed into a tizzy this month as Trump's tariffs have officially gone into effect, most notably a 104% rate on China that kicked in today.
The Dow Jones Industrial Average (^DJI), Nasdaq Composite (^IXIC), and S&P 500 (^GSPC) are all down about 10% from March 31 to April 8. Momentum stocks that have minted money for many investors over the past two years are down even more this month — with Nvidia (NVDA) and Apple (AAPL) down 12% and 21%, respectively.
Signals on the health of the US economy have begun to weaken beyond the pressure on the stock market.
