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Welcome to Capital Gains. Yahoo Finance's unique look at how US government policy could impact your bottom line. I'm your host Madison Mills. This week, the Federal Reserve keeping interest rates steady, saying any inflation from tariffs could be transitory, bringing back the big Two. Meantime, President Trump calling on the Fed to cut interest rates. We'll break down what's next for markets in.Implications for your money. Plus Yahoo Finance's own Carrie Hannon stopping by the show to discuss the future of Social Security as the Department of Government Efficiency continues their cost cutting efforts. We'll tell you how this could impact your money and all Americans, but before we get into it, let me introduce my co-stars, Rick Newman and Ben Vorska. Hey guys, how's it going?Good enough. Hello. All right, Ben, let's get to what's on the note cards thisweek.

The no card this week. So a pretty common metaphor we've heard in recent weeks is veggies and desserts in terms of what's coming from the Trump administration. The idea being that we we're having the, the less friendly stuff first, the veggies, and then the desserts are coming. But I think we've got a lot of signals this week that even as dessert is kind of seems to be getting farther and farther away, my no card is that moreVeggies are ahead. This is in addition to all the tariff talk that we've had in the last couple of weeks that have really roiled markets. So a couple of them just to kick us off. The first is reciprocal tariffs. This is the next phase of Trump's plan and his big one, as he as he's called it. Rick and I have been covering this week, and the question is whether markets are really ready, or really understanding what could be coming here. I talked to a really smart market watcher this week whotalked about how when they, when the Trump administration is going to is going to set a rate for each country, some of those rates could be 50%. I don't know if markets are really ready for that and sort of accepting what that is on April 2nd when it comes to a few other quick ones that I think are are perhaps a little bit below the radar but are sort of other veggies, call them broccoli, call them kale, whatever, whatever you want from there. One is one is Trump and Fed independence, you know, you mentioned Trump criticizing.Um, Jerome Powell and, and lower on rates this week, an equally significant development is Trump firing sort of what are called independent, uh, people who work for independent agencies. The granddaddy of them all, of course, is the Federal Reserve as an independent agency. They've traditionally beenUm, able to not, not be, not have the president we've come in, and the, and Trump is clearly aiming to change that. How far he goes remains to be seen, but that, that could be kind of have a lot of market impacts. Other things like the rule of law, this has been kind of less in the business press, but I would remind when Trump goes head to head with judges, this was literally the case from folks like Reid Hoffman and Mark Cuban during the campaign as to why Trump would be bad for markets, that if you undo the rule of law, that's really bad for.Businesses. So it's another one where we're kind of waiting to see how far he goes on there. Ukraine is the last one I just real quickly, which is that we, this war is not ending anytime soon. There was a lot of back and forth there this week, and it's clear that this is going to be a long slog, as somebody put it this week. This is, this is going to take a while to end and there's a lot of geopolitical implications there and economic implications. I'll, I'll stop there, but Rick, what's your favorite metaphor of this week? And you

know, OK, I'm pushing back on the veggies. Um, I like veggies.I, I've said this before. I mean, so, OK, sorry, so I'm, I'm world famous for my backyard tomatoes, and I, I grow kale in my backyard. I mean, it actually somehow comes up on a green thumb.

Hell yes, I

didn't know you will find out. You will have, you know, tomatoes sitting on you. OK, never mind, we'll get to that later. I think we, I, I want to propose a new metaphor here. I, uh, I, I, I mean, this is a work in progress, this metaphor. I feel like Trump, team Trump is.I'm imagining like this Dickensian economy where Trump and the rich people, Elon Musk and Bessson and Lutnick, they're having a banquet. They're mowing down at the banquet, OK? And then, uh, and then they have all this leftover food, you know, the, the all these big things on, on bones, you know, drumsticks and stuff, and they throw it out the window because they're too they're too anti-woke to use a garbage bag and the food they throw out the window, the huddled mouses go.Running over to get the food, um, because the whole, whole rest of the economy is going down the drain and nobody can afford food anymore. And by the way, they're chucking eggs. They're just, they're, they're just, honestly, they're, they're they're, they're, they're so gluttonous. They're taking whole cartons of eggs that cost $12 a piece and they're just dumping them out the window and they're breaking and the people are like, just to get some egg protein because they can't afford eggs anymore. Um, that, that's that's metaphor.Does that work for anybody? OK, never mind. Um, so, so Ben and I have been like looking at tariff spreadsheets all week and trying to figure out, um, OK, reciprocal tariffs means you have to figure out where their tariffs are higher than our tariffs, and then that, those are gonna be the countries, nobody should do this at home, that you will, you won't, you won't make it to the to the to the next day if you get into these tariff databases. Here's what I think is happening. So, uh, it was Lutnick.Uh, no, sorry, Besson, the Treasury secretary, he said they're going to be the dirty 15 countries. Ben, if you followed, if you follow the dirty 15 countries that we're really gonna focus on. So which countries are the dirty 15 that are gonna really get it, um.Some of it's probably gonna be the some of the countries that have the highest, uh, we have the highest trade deficit with, and that includes China, Mexico, uh, which are already in Canada, which we already know, but here are the other ones, Vietnam, Ireland, Germany, Taiwan, Japan, South Korea, India, Thailand, Italy and Switzerland. So I, I will stop there for the time being, but um.We're gonna get a lot of new tariffs on Switzerland, so whatever you buy from Switzerland, get it now. Your chocolate,

chocolate, then also, I mean, it reminds me of something an analyst told me this week called it the vanity trade in terms of some of the GLP one medicines that we're getting, some of the intricacies of those products, your syringes coming from some of those countries Rick just mentioned.And those costs are already sky high. Uh, one thing that I've been talking to a lot of investors about is which sectors of the market are going to be most impacted. We had Piper Sandler, analyst this morning, downgrading all US auto companies saying that every single one other than Tesla could be negatively impacted by tariffs, and they actually said, we can't make recommendations to you guys.On where these stocks are going because tariffs are so uncertain, which is also what the Federal Reserve basically said this week with Fed Chair Jay Powell saying, anyone in the room from the journalist squad want to do the dot plot for me because there's no way to tell where things are heading with so much tariff uncertainty. And I think there's this hope in the market that we'll get clarity on April 2nd, butI mean, are we gonna getthat?

I don't just one interruption in that Piper's, by the way, I keep doing this because Matty's like we're here I'm right here with, um, but we're looking at different cameras. Piper Saler did say the one part of the auto industry that might be relatively immune from tariffs is used car dealerships. Um, I guess that's Carvana, which could honestly use a break. But anyway, sorry, Ben, I know you, I know you have thoughts. Yeah, no,

the only point I was gonna add is that I think part of the uncertainty here is that reciprocal Trump.It can be whatever Trump wants it to be. In other words, like they're talking about using value added taxes. They're about all these other factors. So if you, the, the, the chart of which country's tariff and which don't is really valuable as a starting point, but what I think is making it so uncertain for people is that he's going to add kind of whatever he wants, and it sort of goes into all these factors and maybe it sort of crushes the auto sector because he's sort of that's his overall goal here, and he's, and he's aiming at that. And what I think is adding to this uncertainty is that it's, it's sort of they can move the levers however they want and and on April 1st.And April 2nd is when we're going to get these these numbers, which I think are going to be really surprising to a lot of folks.

And but is it going to be like the final number? I mean, I think absolutely not. I mean, they're just gonna keep going. So

theykeep changing for certain,

yeah. So, um, so Tesla came up. I just want to say one thing about Tesla. How sad is this company now that number one, President Trump has to has to flap their cars on the on the front lawn of the White House, and that's not good enough. So Lutnick, who left his firm Cantor Fitzgerald, then correct me if I get the.Details wrong here, but Lutnick says, oh, my firm, um, now has a buy rating on. Now, let's just take a second to think what's going on here. So the commerce secretary who was supposed to sever, um, his financial relationships, right, with, with, uh, that so that so that there could be no conflict of interest is flacking the stock of the guy who is doing his bidding by dismantling the government. So has Tesla become a company that simply cannot function anymore as a regular for-profit.Company, is, are they gonna, is the transportation department gonna annex it? Is it going to be the official supplier of all vehicles to the US government? I mean, this is absurd and ridiculous.

I think I, I keep bringing this up to analysts who keep being bullish on Tesla and saying that the stock has always gone up. What's required for Tesla to succeed as a company is that people are OK with being seen inside of a car that has the word Tesla on it, and I don't know if that's going to continue to be true anymore. Ben, what do you have to add on the Tesla conversation?

Yeah, no, I think it's, I think it's that it's a real big issue here in Washington too, for certain of sort of what political message you're sending, you know, it's the I I I see the cybertrucks and I see the cars around here and it's, you can see them, you can see people pushing, pushing back and, and, and perhaps, you know, in a hyper political place like this in DC going there. I'm, I'm a little skeptical of a of a broader things. I think people kind of see cars as cars and so the question is whether it starts to become all across, everyone seems to be.If you're riding a Tesla, you're you're you're a Musk. I

mean, so this is like how big of a sucker are you? Um, so Teslas are plunging in value in the used market, number one, because there's just there are just too many electric vehicles right now. Number 2, because Trump has been trashing electric vehicles, he wants to take the subsidies away, which is going to harm the whole industry. Um, and number 3, Tesla now is a political brand. So and the people who buy electric vehicles are by definition.Not mega Republicans. They hate electric vehicles because Trump told them to hate electric vehicles. So the, now the, the sort of value proposition for Tesla is, let's get all these Trump voters to now go out and buy, buy a Tesla and rescue the company.

I reallyappreciate you guys making the time to break down everything we need to know from the week when it comes to tariffs, Federal Reserve policy, and of course, Tesla, the conversation that never seems to go away. We're going to take a quick break, but we're gonna be back with more on capital gains next.Welcome back to Capital Gains. We're now joined by Yahoo Finance senior columnist and retirement expert Kerry Hannan. Carrie, it is amazing to have you here this week. I can tell you I have gotten hundreds of questions on all my social media accounts about how the current administration is impacting people's retirement accounts, so we can't wait to chat with you. I just want to start on Social Security. Is it over?

Great question, Mattie. It is, you know, but like yourself, my mailbox has been flooded with questions about Social Security. Should I start claiming right now? I mean, is it OK to still wait until I'm age 70, which we always tell people to do if they can. And frankly, I mean, I don't know. That would be the best answer because things are in such flux, but if you look at the chaos going on at Social Security Administration right now, you got to say something's going to fall through the cracks here. And so I'm concerned about it. I think that's the, the overall feeling. It'sHard to shake this at the foundations. It completely make it fall down, but I do think we're going to see some changes. I will say one thing that just happened this week that's making me crazy is they're taking away the option for people to call into Social Security to make changes or to start their their benefit process. And for people who live in the country in rural areas or, or don't have a computer or a smartphone and they don't have internet service, this is a huge problem because couple that withThe closing like 76 field offices around the country, and this is a real burden for people who, you know, will not have access and have to drive miles and miles and hours to get to a Social Security office if you can get an appointment, and it takes about a month. And if we even go to the phone service right now, I have a friend yesterday who was on for 2 hours on the call. So if you think about this, I think getting access to your Social Security account is going to be quite tricky for people, moving forward, particularly seniors in rural areas.

So Carrie, you know, I think for those of us who are covering the Trump chaos, um, we don't want to be hair on fire about everything because you do have to separate out, you know, these things they say they're going to do, but then you realize, well, the ones that turn out to be most controversial, uh.A lot of times they backtrack or the court stops it or something and somebody realizes, well, that actually is a really stupid idea. Are you detecting that these things are already starting to happen with regard to, you know, the administration of Social Security, which you're just talking about? And if not, what, what do you think are gonna be the first signs of cracks?

I think, uh, you know, if we're talking specifically stillre about Social Security, it's going to be a delay in getting checks. It's gonna be this lag time and being able to sign up for your benefits. I think we'll see things around the edges there that will start creeping up, um, and to profoundly change the system, it has.Go through Congress, correct, and Ben has been keeping a good eye on this. I just don't know. I mean, as you said, you can't just raise the, you know, fire engines every time because they push, push, push, and then they do retreat. But this is the heart and soul of of America, the senior system in our, in our um.And, and sort of what people depend on. So it, it does alarm me more so than it ever has before, because even in the first Trump administration we had a lot of chaos too. But this seems like, you know, if you think of a washing machine where it goes on the, on the spin cycle and then it quiets down for a little bit and it starts up again just as fast, I feel like we're in that cycle right now and it's not ever coming to an end. It's hard to foresee it at any rate.

Carrie, you, you brought up, you brought up Congress. I have a question for you. Next week, um, if you don't realize that the next commissioner, the potential next commissioner of Social Security is going to be before senators. It's its confirmation hearings on Tuesday. Um, I just, I've just appointed you to the Senate, Kerry. What do you ask him? What's the question you ask? What's the promise you try to ascertain? What do you think will help, um, what, what can he say next week that could help kind of calm some of these fears?

Well, you know, Ben, I guess the ultimate thing is to say we're not planning on any major changes to help people receive their benefits. These are Americans who have paid into this. This, this is money that they have from their earnings that they've paid into it. So you want to hear that he's not going to radically alter how it is. Yes, we all.that there have to be some changes, and this has been known for a long time and we're getting closer and closer to when Social Security really is in danger. So I hope that he's open minded about, you know, not calming people's fears about Social Security going away in some in some fashion.

Hey Car, you follow a lot more than, uh, Social Security. There's also, of course, Medicare, the uh health program for retirees, and then Medicaid, uh, the health program for lower income Americans including uh and disabled people, um, that's a huge bucket. So for people who are concerned, um, like how would you prioritize among those three programs the things to be watching for?

Well, number one, Medicare, we're going to see an increased push to privatize Medicare, to move forward, you know, push further into Medicare Advantage, which has already taken over the lion's share of where people enroll.

I just interrupt here, just briefly explain what that is and would that necessarily be bad?

Uh, privatizing Medicare to have more private Medicare advantage. Well, here's the thing, on many levels, it seems glossy and fun, right? You get vision, you get all these different things and bells and whistles, vision care, dental care that, uh, traditional Medicare doesn't offer you, and it's the cost effective from the beginning. But what happens is you have to go to doctors within their network. So if you have a doctor you've been going to for 20 years or you need a specialist for something that's out of network, this becomes quiteA problematic for people, and there can be delays in getting approvals and, and so not being able to get access to the specialists you needs as you age and so forth becomes something that that can be quite costly for people ultimately and when they have to step out of network in order to get the care they need. So we've seen some big problems with the Medicare Advantage arena in the last year or two. lots of attention has been paid for to this, and we see some providers stepping out of Medicare Advantage.This year. So I think there's it's, it's tricky to privatize this because right now people can have an option to get out of Medicare Advantage and move back to traditional Medicare, but that's not an easy thing to do either. So I do think what concerns me is the level of health care that Medicare, traditional Medicare is, in my opinion, uh, one of the best things going. And so Medicare Advantage, it seems there's lots of flashy ads on television and lots of insurers make a lot of money off of it, but I don't think for individuals it's necessarily the best.

And Carrie, I am getting a lot of questions from people about the volatility that we've seen in the stock market. Uh, it is in correction territory, of course, after two years of double digit gains. So if you zoom out, it's not as severe, but for people nearing retirement.They're really concerned that we're about to have a market crash and that's obviously going to impact how much money they have for retirement. For people who have anywhere around, let's say 5 years left before they are looking to retire and cash in more of their retirement funds, should they be reallocating at all?

I mean that's a super question. And yeah, I think maybe they should. Um, you have to keep a presence in equities. People are living 2 and 3 decades in retirement, so you need equities for growth over time. But frankly, if I, if you're nearing retirement, uh, all the pros I've talked to say, hey, you know, try to have, if you can, 5 years of living expenses in, in cash or cash equivalents like money market accounts, CDs, high yield savings accounts. These are yielding around 44% right now. It's not great, but you know what, it's steady and you need to know.You can, it's a cushion, so to speak, you know, you can just chill a little bit. Otherwise, you kind of want to sit on your hands a bit. The markets have always been volatile, and yes, we may see more than we have seen over other periods of time, but this is not the time to be crazy trying to sell out and buy in at a certain time. Remember, even if you have 5 years to go to retirement, and if you're in a 401k plan and at work or you're automatically investing right now, uh, you are getting in at these lower costs and so it's going toEven itself out, and that's the ticket. Let a lot of things, you know, you do want to reallocate. You should always be talking to a financial advisor if you can, in order to make sure that you're diversified across the different asset classes so that the equity part of it doesn't make you, uh, stay up all night and freaking out over losing all that you have. You do not want to be in that situation. So talk to somebody, you know, sit on your hands if you have to, but definitely, I like, you know, it's still the old, the old chestnut.110 minus your age should still be in equities, and I think long term that's probably not going to hurt you.

All right, I don't want to run, I want to run a lightning round here. So, Carrie, when we're planning for the show offline, uh, we channel what our moms and dads are asking us, these questions they're asking us. So we might have a, so I'm gonna do each of us. So what my mom wants to know about Social Security is why does Elon Musk need my personal information? Maddie, who's sitting right here by the way, uh, Maddie, what do you, what do your parents want to know?

My mom wants to know if she needs to worry about having too much in stocks.

And Ben.

Um, my mother's traveling this week. I haven't asked her.

All right, it's only 22 questions. We kind of covered the stocks. What about Elon Musk? Why, why does he need, what, what's the answer to some, I mean,

I find that right you guys, I find that terrifying. I, I don't see why he needs to know any of this stuff, but we know that there is a motive for it, and, and getting this kind of personal information about people is pretty powerful. So, uh, apparently that's what, what's happening, and, and I don't think he does.He did. Um, one thing I want to say to you all though is truthfully, a big problem is if we do go into a recessionary time and the inflation continues to pop up, debt is a huge problem for older adults and people who are nearing retirement with credit card debt, this is really problematic. And I think this is something if you have time, uh, right now, if you can start paying down some of that debt and making sure you don't retire.With debt with credit card debt in particular, but seniors are even using their home equity loans to pay for medical costs that that aren't covered under their insurance right now. So I think that it's important to get as financially fit as you can with your budgeting and so forth just so that you're prepared.

Carrie, I genuinely can't think of a more important conversation to answer the real questions that our viewers.Right now, we would love to have you back soon to answer more of our mother's questions. Kerry, thank you so much. Really appreciate it. Thank you for your time. Thanks guys, bye. And that's going to do it for today's episode of Capital Gains. Thank you again to Kerry Hannan, Rick Newman, and Ben Morshko for being here today. And thanks to our audience. Make sure to like and subscribe to Capital Gains wherever you get your podcasts. Until then, we'll see you next time on Yahoo Finance.