- When Consumers Are Confused About The Economy, They Pause
- The Tariff Damage To Economy May Not Bring Down Rates If Inflation Surges
- The Odds Of A Recession Are Now At 60%, Up From 40% A Few Days Ago
Wow. What a bizarre news cycle. This note will probably sound more like a rant than a measured discussion because that would be impossible for me. There is no apparent cohesive strategy for the implementation of US import tariffs worldwide – it’s just saber-rattling. These tariff actions seem devoid of any understanding about what they actually represent – a tax on the American consumer who is already pressed by higher costs. The next wave of economic damage from retaliatory tariffs is already coming from our once long-term trading partners. JP Morgan just raised the recession odds to 60% [free link for a week], up from 40% just a few days ago. That means expanding job loss – hundreds of thousands of people will lose their jobs in the near term. The Fed expects tariffs to raise inflation and slow the economy, while the majority of the US wants the focus to be on lowering prices—quite a disconnect. Therefore, cutting rates would likely cause even more inflation. Does this sound confusing? It should. What do consumers do when they’re confused? They pause, and investors flee.
From the Roosevelt Institute: Trump’s Tariff Tantrum: How Sweeping Tariffs Came to Be and Why It Matters: “The April 2nd policy alone is the equivalent of an 11.5pp increase in the effective tariff rate. When combined with other US tariffs in 2025, we’re at 22 1/2%, the highest rate since 1909.”
Primer On Tariffs Making The Great Depression Worse
I always learn better via cartoons…
Final Thoughts Rants
Every so often, an economic topic comes up that needs to be explained from all angles so its impact on the housing market can be better understood. However, I am unable to do that today due to this tariff tantrum situation. If the new tariff policy severely damages the economy, interest rates could fall, but hundreds of thousands of layoffs would occur, and those people wouldn’t buy houses. As a result, I’m having a hard time rationalizing a “good” scenario for a tariff outcome other than stopping it. Hopefully on Monday I can switch topics and lighten up a bit.
The Actual Final Thought – Understanding what tariffs are is not rocket science.
My Podcast – What It Means with Jonathan Miller
This podcast was recorded two days ago, which feels a lot longer ago, economically. I hope you enjoy it! It is sitting on YouTube for the moment, but I will get a proper feed very shortly, and I’ll share it here.
Click on image below or to go to the podcast.
Did you miss the previous Housing Notes?
Housing Notes Reads
- Palm Beach now home to 67 of the world's billionaires, says our look at 2025 Forbes data
- Manhattan Home Sales Soar as Buyers Seize on Mortgage Rate Dips [Bloomberg]
- 💸 Boca's Big Bet [Highest & Best]
- Exclusive | Sold for $86 Million: An L.A. Compound With Rod Stewart’s Former Mansion [WSJ]
- $70M Hamptons Estate Sale Marks Major Oceanfront Deal [Behind The Hedges]
