Torsten Slok on Tariffs and Financial Turbulences

Video & Timestamps

On Wednesday, April 9, Torsten Slok joined Markus’ Academy for a conversation on “Tariffs and Financial Turbulences.” Torsten Slok is a Partner and the Chief Economist at Apollo.

Watch the full presentation below.  You can watch all Markus’ Academy webinars on the Princeton BCF YouTube channel.

Timestamps:

[0:00] Markus’ introduction

[8:40] Trade and Tariffs

[29:11] Market turmoil dynamics

[49:52] Conclusion and the Fed

Executive Summary

• A summary in three bullets

• • It is correct that the U.S. has lower tariff and non-tariff barriers to trade than many countries. Yet the decline in U.S. manufacturing is not entirely attributable to China, and may be due to long-term trends in productivity, technology, and manufacturing efficiency
  • 6 downside risks in the U.S. economy: (1) Consumer and (2) Corporate confidence are deteriorating, (3) Negative tariff impact on earnings, (4) negative impact from retaliation, including from a decline in tourism, (5) (temporary) $10 trillion drop in the S&P 500, (6) DOGE-related layoffs
  • Historical correlations are breaking down across equity, rates, and credit markets. The last week saw a much smaller sell off in credit markets compared to equity markets, and, in contrast with prior crises, Treasury yields have not come down as stocks have declined
• Click here for the full summary