Yahoo Finance

We've been talking a lot about the capital T tariffs, the 145%. I want to ask you as well about the de minimis exemption which goes away today, right? So this is um shipments and goods of under $800. Yes, it's the Taobao's and Shein's in the world, but it's also a lot of small businesses in the US that import goods and send them to their customers. So where where should we look for that in the data and what effect do you think that's going to have?

I'm glad you mentioned small businesses because we tend to overlook them quite a bit. We focused a lot on big corporations that have lobbying power, that have buffers, that are able to withstand these shocks. Small businesses do not have that ability. If you look at small businesses, they represent about 50 to 60% of employment in the US. And if you take businesses up to 500 employees, you're talking about 80% of employment in these small businesses. These types of shocks are massive for these small businesses. And it's not a question of whether you delay investment, you delay hiring as a small business, it's really a question as to whether you can continue your operations. Do you have enough cash on hand to be paying these tariffs when they come into into your doors? And the reality is that unfortunately, many businesses are going to come under increasing pressure from the tariffs on China, from the end of the de minimis exemption, and from all of the tariffs that are being imposed on all of our trading partners. There's nowhere to hide from a small business perspective side, and we've already started to see it in terms of the economic data. The ADP report earlier this week showed that small businesses were shedding jobs. Other businesses were still hiring.

Greg, uh, Jordan Greg mentioned the Fed big meeting next week. I'm just curious what you expect there. I mean, J. Powell has clearly signaled, listen, monetary policy is on hold.

Yeah, I think, you know, this this report pretty much solidifies that they're not going to move next week. Um, I think the Fed's probably going to lean a little bit more in Powell's camp in terms of they can be patient, they can be cautious here, they don't need to overreact. Um, I'm still in the camp that the Fed's got two cuts in the chamber this year. I think they go in September. I think they go in December. I think they want to wait things out over the course of the summer before they try to react, because what they don't want to do is find themselves in a situation where they cut too much this year. Now you've got, you know, helping them potentially stimulating some demand on the back of fiscal support juicing up the economy, the additional tax cuts next year, and they've got to come back in 2026 and hike rates again. I think they really want to avoid that. They also want to avoid using the word transitory. Uh, they've gotten penalized before for for using transitory before in 2022. Um, and so I think, you know, they may they've got to kind of acknowledge the continuous deal making happening and, you know, the gradual pullback that's going to have an impact, probably a lingering impact on inflationary pressures. I don't think it'll need transitory, but uh we're still think you're going to get this pop and inflation in the near term, but things still should start to subside later this year into 2026.