Futures Power Hour - May 9, 2025 - Trumps Opening Bid

This episode explores the potential economic impact of proposed tariff changes between the U.S. and China, focusing on the implications for markets and the likelihood of a recession. Against the backdrop of President Trump's proposal of an 80% tariff rate, the discussion questions whether this is a serious threat or a negotiating tactic ahead of U.S.-China talks in Geneva. The speakers suggest that tariffs above 60% effectively act as an embargo, and the market's uncertainty stems from the extended timeline for trade negotiations. More significantly, the conversation shifts to the possibility of a recession, with one speaker suggesting it's not a question of if, but rather how short and shallow it will be. As the discussion pivots to potential responses from the Federal Reserve, the speakers note a decrease in the odds of a June rate cut due to sticky inflation and a strong underlying economy. The episode concludes by examining the potential for a "muddle through" economy, similar to 2022-2023, where the economy remains more intact than presumed, even with tariff-related adjustments and the possibility of stagflation.