Forget tacos, can Trump have his tariff cake and eat it too? Wall Street’s biggest bull thinks so

• If president Donald Trump’s tariff About 10 % stabilized, this still allows the Federal Reserve to reduce prices later this year while achieving revenues that help in the huge budget deficit, according to Christopher Harvey of Wales Fargo, who believes that a tax on this level can be divided between importers, companies and consumers.

There was a lot of talk recently about President Donald Trump and Taku, but it could be another food that is included in the tariff conversation is the cake.

While his announcement of the “liberation day” that was announced on the market, it has significantly declined from his most aggressive position since then, despite Friday night he said that he would double the steel tariffs to 50 %.

The general trend of travel is still positive for Cris Harvey, the head of the Wells Fargo Securities strategy, which makes it the 7,007 S&P 500 price goal in Wall Street.

“The Trump administration wants to push things forward,” CNBC told CNBC on Friday, hours before the Steel announced. “It seems that they want to push the ball forward, and I think this is positive. We are now at the point where I think we will start hearing some real concrete results in the next two weeks.”

Harvey added that he believed the stocks can jump with double numbers in the second half of the year. His S& P 500 expectations mean an increase of 18.5 % of the closure of Friday.

There is a major piece in its thesis that is fed in the statement of the recent governor Christopher and wire that if the customs tariff ends by about 10 %, the central bank may be in a position that allows it to reduce prices in the second half of the year.

The customs tariff is generally considered as inflationary and can force the Federal Reserve to stop cash dilution. But if consumers treat them as raising one -time price and maintaining long -term inflation expectations, there can be a deadline to reduce rates.

Currently, the effective tariff rate is still above 10 %, although estimates are different. The YALE Budget Laboratory is 17.8 % last month, while Fitch put it 13 %.

Harvey expects that the customs tariff will settle in a range of 10 % and 12 % and said that even with clients expressing anxiety about every uncertainty, they are still comfortable with the basics of the economy.

This has drove Scott and Benner from CNBC to the question whether Trump could get his cake and eat it as well, that is, to move forward in his induction agenda and get discounts in the federal reserve rate he was demanding.

“I think that,” Harvey answered. “So the reason we said 10 % is with 10 % we believe that a third will be eaten by the importer, the third that the company eats, and the consumer will eat a third. This is not a big effect.”

At the same time, he added that the customs tariff will achieve revenues that could help in the federal budget, which has seen a great deficit in recent years.

Fears that the deficit will get worse according to the proposed Trump budget that works on its way through congress that led to fluctuations in borrowing costs as the bond market tensions have been exposed to the treasury.

Meanwhile, as commercial talks continue, it is important for the Trump administration to reach deals with India, Japan and the European Union, adding that China is less important because the United States is not in its mediation anyway.

But if the induction uncertainty extends in June and July, companies may start changing their salary lists, then “things begin to collapse.”

That is why it is necessary to make progress in trade and reach deals with large economies such as India, Japan and the European Union, Harvey said. In this way, the markets can focus on the effects of tariffs in the short term.

“Then you can start induction,” clearer. “Then the market begins to search for things. They start searching for any kind of economic slowdown or weakness, then we start searching for ’26 and not at ’25.”

This story was originally shown on Fortune.com

2025-06-01 17:51:00