No. of Recommendations: 10
Torsten Sløk, Chief Economist at Apollo Asset Management with $548 billion of assets under management, formerly with the IMF in the division responsible for writing the World Economic Outlook, predicts there is now a 90% chance of what can be called a Voluntary Trade Reset Recession (“VTRR”).
Umm, VTRR?
Why not just call it was what is: Trump Recession.
Anywho, Sløk writes:
The administration inherited an economy with strong growth, 4% unemployment, positive hiring, and a substantial tailwind from investments. US and international investors are building infrastructure, next-generation factories, and data centers. The Inflation Reduction Act increased capex, and the US was poised for a substantial increase due to energy supply additions, increased defense production, and deregulation.
But implementing extremely high tariffs overnight hurts many businesses; particularly small businesses because the tariff must be paid by the business when the imported goods arrive in the US. Small businesses that have for decades relied on a stable US system will have to adjust immediately and do not have the working capital to pay tariffs. Expect ships to sit offshore, orders to be canceled, and well-run generational retailers to file for bankruptcy.Sounds about right since small businesses account for more than 80% of US employment and capex.
And the impact that Sløk sees on GDP?
The negative impact on GDP in 2025 could be almost 4 percentage points, not including additional non-linear effects because of the current increase in uncertainty for consumer spending decisions and business planning.Huh.
According to Mad King Donald, Sløk must be one of those
BUSINESSMEN WHO CRITICIZE TARIFFS [who]
ARE BAD AT BUSINESS.
https://www.apolloacademy.com/probability-of-vtrr-... 