‘The Big Short’ investor: As Trump mounts new tariffs, economy is experiencing ‘stagflationary period’

Danny Moussa, founder of Musa Fitshers, who is famous for the book, turned into a transformation movie The Great Short, He warned that despite some strong economic indicators in the face of induction uncertainty, the signs of recession are already on us.

“There are so much moving parts to the point where it is really difficult to decipher the place you will determine,” Moussa said. luck. “Anyone can find a data point that it says is an inflation, and someone can find a data point that it says is not. So it is very difficult. But the bottom line … is it [economy] You are stagnating? It seems to me, it’s. ”

On Friday, president Donald Trump announced a new round of sweeping tariffs, including a 39 % tax on Swiss exports and 35 % tax on some Canadian exports to the United States, the administration extends over the deadline for trade to other countries including Mexico, and the largest trading partner in America, which gets an additional 90 days. The logic behind the customs tariff is slightly from the previous rounds, as Trump has argued about the fees as a way to eliminate the trade deficit. The United States, for example, has a trade surplus with Brazil for a decade. Instead, Trump imposed a sharp tariff on Brazil for political reasons, such as the trial of the ally and former Brazilian President Gere Bolsonaro, who was accused of planning a coup after losing the presidential elections.

The markets decreased after the announcement-in addition to the more than expected jobs report-after a week after a week of strong profits and commercial concerns faded. But Moussa said that the last round of definitions again sparked anxiety about the future of the economy, which made investors “a little more anxious about the inability to predict what will happen.”

Moussa said: “No one knows how this will penetrate this, because this type of unprecedented tariff is not like.”

Where is the extension?

Fears of recession, or stagnation of economic growth that coincides with inflation, especially after the GDP data on Wednesday that shows a recovery in American economic growth in the second quarter of the year. This is a negative estimate in the first quarter of GDP, which was largely due to the timing of commercial chaos that force companies to store goods before pricing in consumers who buy this stock. Ultimately, the growth in the second quarter cancel the shrinking of the first quarter, despite the slowdown in economic growth in the first half of the year.

White House spokesman Kush Desai said luck In a statement that growth recovery and “cooling enlargement … indicates that the recession is simply the latest word for melting. [sic] paranoia.”

Moussa said that the economy has not yet seen the complete impact of definitions. Federal Reserve Chairman Jerome Powell kept interest rates this week and said more information is needed to provide prices.

“The high definitions began to appear more clearly at the prices of some commodities, but its total effects on economic activity and inflation still should be seen,” Powell told reporters in the wake of the Federal Reserve meeting on Wednesday. “There is a reasonable essential condition that the effects of inflation can be short-term-reflect on a single-time shift in the price level. But it is also possible that the inflationary effects are more stable, and this represents the risk of its evaluation and management.”

Moussa said that inflation will not likely increase as it has already begun, albeit modest, but companies will continue to face the impact of definitions. Apple was the newest giant that was burning from the definitions, as it reported on the strong profits on Friday, but $ 1.1 billion of the fees. With companies continuing to calculate the impact of definitions, they are likely to choose both margins and settle growth, in addition to raising prices on goods, according to Moussa, as the recession was the most likely result.

“Choose fish,” said Moses. “Either you reach corporate margins, the profits will decrease, which means that the market is expensive, or will be transferred to consumers and be inflated. I think it will be a mixture of both.”