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The Street
  • yesterday
As Wall Street fixates on tariffs, some analysts warn the real recession risk lies in Fed policy.
Transcript
00:00Well, with regard to the trade war impacting the economy, we have a non-consensus view in that it's important to keep in mind that only 13% of the U.S. economy are imports.
00:13So even heavy taxes, right now the proposal's effective tax rate on that number of less than 10%.
00:22So it's only $175 billion on a $30 trillion economy.
00:27So we think that the recession fears from tariffs are way overblown, but not nearly enough focus on the potential for a recession from ultra-tight monetary policy.
00:40Again, investors just massively underestimate how powerful monetary policy is.
00:46So we don't think there's 0% chance of recession, but we think it's very modest because, again, housing's holding up, which it normally doesn't, and tariffs are irrelevant.
00:56At least compared to the drop in energy prices.

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