VIDEO Watch "Stockman: Trump’s Tariffs Will Hit the Economy with a ‘Gale Force’ that Will ‘Accelerate’ Inflation" on YouTube

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Stockman: Trump’s Tariffs Will Hit the Economy with a ‘Gale Force’ that Will ‘Accelerate’ Inflation In a September 11, 2018 segment of "Varney and Company" on Fox Business Network, David Stockman, former budget director under President Reagan, shared critical insights about the impact of Donald Trump's tariffs on the U.S. economy. In the discussion, Stockman argued that these tariffs would lead to a significant acceleration of inflation, which would compel the Federal Reserve to tighten monetary policy more aggressively. Stockman emphasized that the market was in a dangerous phase, citing the lengthy duration of the current economic expansion—over nine years by that point. He indicated that the Federal Reserve's efforts to normalize interest rates after a period of unprecedented low rates could provoke a market adjustment. Noting the Fed's tightening measures, Stockman warned that this would not only potentially trigger a recession but also significantly increase inflation rates due to the tariffs. The conversation touched on several critical points: 1. Economic Cycle: Stockman pointed out that the U.S. was at the tail end of a business cycle, reminiscent of scenarios preceding prior downturns. 2. Deficit Concerns: He highlighted Trump’s proposal to increase the federal deficit to $1.2 trillion, a move he deemed reckless, especially given the late stage of the economic cycle. 3. Investment Strategy: Stockman advised investors to consider moving assets into cash or Treasury securities in anticipation of a market downturn, suggesting that waiting for a correction would present better buying opportunities. Throughout the interview, Stockman's warnings painted a rather bleak picture of the economy, raising questions about sustainability in the context of Trump’s fiscal policies and international trade stance. The broader implications of these tariffs and budgetary decisions remain relevant as they can have lasting repercussions on inflation, market stability, and fiscal health. As we reflect on these discussions from 2018, it’s interesting to note how the themes of economic cycles, federal policy, and inflation persist in today’s economic dialogues. How do you see these issues evolving in the upcoming years? Feel free to share your thoughts or any related experiences in the comments below!