Investors didn't like President Trump's tariffs, with all three of the major indexes selling off sharply on the announcement. The Wall Street Journal's chief economics correspondent Nick Timiraos explains why Wall Street is rattled by the plan.
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Nick, it's not just the US that is at risk of entering into a recession because of these tariffs. What are your sources telling you about the risks globally for an economic slowdown?
Well, it's not, it really isn't about sources at this point. It's about what, you know, you look at what, what the markets are doing right now. The administration has been saying short-term pain for long-term gain, but the market doesn't see it that way. The dollar is down, bond yields are down, stocks are down. People are talking about higher inflation this year, but with more rate cuts from the Fed, uh, later on to cushion the hit to growth. I, I think what you see here is Wall Street going through the five stages of grief. Um, you know, we're, we're clearly out of the denial stage now, but whether we're in anger, bargaining, depression, you know, I think it depends on your perspective which one you're in. We're not at acceptance yet. That's what we're seeing happen this morning in the markets.
So Nick, really quick, if we're going through those five stages of grief, what does it take for the corporate executives who speak to you anonymously and say that they are fed up with these policies to be a little bit more vocal in order to get the president to pause on some of these policies?
I think that's a great question. I, I don't think we know what it's going to take. Um, and it's, you know, we're, we're sort of in uncharted waters here. Uh, so we'll, we'll just have to wait and see. I, I think that's the right question right now is where is, you know, people are asking, where's the Fed put? I think the question is where's the White House put at what pain point do members of Congress and businesses begin to put pressure on the White House to, to, uh, you know, to negotiate or do, do whatever is going to happen here.
