This interview podcast features a discussion between Jack Farley and Joseph Wang, an expert in central banking, about the potential impact of President Trump's tariff policies on the US economy and financial markets. Wang argues that the market misunderstands Trump's plan, which he believes involves significantly raising tariffs to reshape global trade and increase government revenue. The conversation explores the potential inflationary effects of tariffs, the Fed's likely response, and the implications for stocks and bonds, with Wang predicting a bearish stock market and bullish bond market due to growth concerns outweighing inflation concerns. Wang cites a study showing that previous tariff rounds were not inflationary, but acknowledges the possibility of future inflation. He concludes that the market is complacent about the risk of higher tariffs and that a significant increase in tariffs could lead to rapid rate cuts by the Federal Reserve. As a specific example, Wang highlights the potential impact of tariffs on mega-cap companies heavily reliant on global trade, such as Apple.
