It's a critical week on Wall Street. 25% tariffs on Canada and Mexico and an additional 10% on China are set to be implemented on Tuesday, alongside new jobs data coming out on Friday. RBC Capital Markets US economist Michael Reid discusses what these events mean for the broader economy.
"It's a really tough situation for the Fed, to be honest," Reid tells Yahoo Finance, noting inflation continues to be sticky and the tariff agenda "adds risk" that inflation could hover around 3%, combined with a labor market showing slowing growth.
He explains this scenario is "typically" what the Federal Reserve would want to "provide an insurance cut" in; however, "with inflation where it is, it just makes it very hard for them."
Reid warns that if Trump's tariff strategy were to be implemented, this would "make it very hard for the North American economy," potentially pushing Canada into recession, while for the United States, "growth would be very sluggish."
Watch the full video above to hear Reid's outlook on how this sweeping tariff strategy could impact consumer spending, as he questions whether consumers "have the ability to continue spending."
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This post was written by Angel Smith