Tariffs, uncertainty dim 2025 outlook: Mohamed El-Erian

요약 보기

트럼프 관세·정책 불확실성으로 미국 경기침체 확률을 10%에서 25~30%로 상향. 기본 시나리오는 아니나 성장 둔화 리스크 큼. 소프트 데이터(가계·기업 신뢰) 악화, 기업들의 관망 확산이 2026년 전망을 약화시킬 수 있음. 2025년 성장률 2.5% 컨센서스가 2% 미만으로 하향될 수 있고 스톨스피드(약 1%)에 근접 우려. 연준의 인플레이션 목표 2% 재검토 필요성 제기. 변동성이 큰 장세에서 개인은 감당 가능한 실수 범위를 점검하고, 기관은 바벨 전략으로 대응 권고.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. President Trump's unpredictable and ever-changing policies rattled the US stock market over the past few weeks, and it could take a little time for things to get better. That's what the president hinted at in an interview over the weekend. And world where supply shocks are more common, there may be a case for the Fed to rethink its approach to inflation.

02. Over the weekend, Mohamed El-Erian, president of Queen's College, Cambridge, wrote that he questions the viability of the Fed's 2% target in a structurally changing world. Joining us now is Mohamed El-Erian, president of Queen's College, Cambridge, alongside Market Domination co-host Julie Hyman. Mohamed, it's great to speak with you.

03. Thank you for making the time. I want to start on comments from President Trump deflecting concerns about a recession this weekend when asked about it, instead just saying we have to go through a period of transition. Where does your recession outlook stand today? So, my probability of US recession has gone up from 10% to 25 to 30%.

04. So, it's not the baseline, it's a fatter tail. Um the reason why it's not the baseline has to do with the structural strength of the US economy. It also has to do with what we've been promised down the road in terms of deregulation, tax cuts, and the reality of low energy prices. So, a bumpy journey with a growth scare, but recession is not my baseline.

05. Mohamed, it's Julie here. Um it's great to see you as always. So, even if recession is not your baseline, there is, as we know, a lot of uncertainty. And uncertainty about where the tariffs will land, if they even will land, which implies some sort of stability. Um uncertainty about how long that growth scare or growth shock could last.

06. How are you thinking about these issues and the sort of timeline? Like, what does 2025 look like? What does 2026 look like? Um so, it looks less rosy 2025 than it did before because we're seeing the soft data weaken. Um the survey data shows confidence going down at both the household and the corporate level.

07. We're hearing more and more wait and see. We will wait and see before we make these investments because companies are looking for clarity. And the risk is the stall speed, that too many people wait and see, and that speaks to 2026. Um so, we'll see. There are two concerns in the marketplace. One is that this unpredictability is not short-term, it's not a bug, but it's a feature.

08. And two, that the tariffs are not cyclical, but they are secular. Um those are the two main concerns, and if they were to play out, then the outlook for 2026 would be less um cheerful, if you like. Right, that assumption that tariffs are sort of here to stick around. You mentioned the hopes that regulation or deregulation will flow through to growth at some point.

09. That takes a little longer. And then the tax cuts is the other big question here. Um even if there is an extension of tax cuts, if there is not then an additional sort of corporate tax cut, I I guess what I'm asking is how contingent is avoiding a recession and/or future growth on extension of the tax cuts and perhaps even deeper cuts.

10. So, so everything has become contingent, Julie. Um we're living in a strange world where no matter what you think about growth, and we've just been talking about the range of possibilities, there's a range of possibilities for inflation as well. So, you know, we have both major macro variables in play right now, and it's very difficult to pin them down.

11. And that is why you're seeing a complete upending in virtually every single consensus trade that was um common at the beginning of the year. Everything in stocks, in bonds, in currencies. We've had a complete upending of the conventional wisdom. Mohamed, you were, of course, at PIMCO, chief investment officer there.

12. And uh if you would this morning, I I imagine that there are a lot of people who are in that position right now, that are trying to figure out what their playbook is for this environment where you're talking about this bumpy road ahead and the growth scare as well. How does that translate through to the investment strategy, both from the biggest money that's flowing around in the market, all the way to a an investor that is just on the retail side and trying to figure out where they need to sit and wait versus where they need to reposition?

13. So, the for for the small investor, um the most important question to ask yourself is what mistake can I not afford to make? Um when the world is really uncertain, the probability of a mistake goes up. Um the biggest mistake an investor can make is to be forced out of a good sit position by high volatility.

14. So, it's really important for small investors to understand the appetite for volatility because we're going to have a lot of volatility going ahead. If you are a large institutional investors with the whole range of tools, then you can make volatility your friend. And you can make it your friend by being increasingly barbell.

15. Earning high quality yields at one end, and then being more opportunistic and much more selective at the other end. And part of being opportunistic is going to take advantage of the overshoots, and we're starting to see some overshoots taking place. And for the company level, I I wonder because you also serve on on the boards of some high-profile companies, the number of tariff mentions that we've heard on earnings calls, highest that we've seen in 10 years.

16. What do you believe companies are trying to get ahead of right now in terms of making sure that they're mitigating the impact that they're anticipating at this juncture as a result of tariffs, and whether or not they will be as extreme as what's anticipated? It's really hard. It's really hard because first, you don't know what the tariff regime is going to be like.

17. Even if you knew what the tariff regime is like, which is a big assumption, you're not comfortable about the price elasticities both on the supply and the demand side. And then even if you knew what the price elasticities are, which which translates to can I pass on the higher cost because of tariffs, or can I compete in a foreign market even though I'm subject to higher trap tariffs because someone's retaliating against me.

18. Even if you all this these things, can you move can you change your prices fast enough? So, it's really hard right now, and that is why the mention of tariffs has skyrocketed in earnings calls and certainly in the board meetings I go to. Mohamed, what do you make of the market sort of ignoring the risk of those tariffs?

19. Uh obviously after the election with the huge run-up in equities that we saw, but even until we saw those tariffs on Canada and Mexico and the additional on China put into place, the market was somewhat ignoring those risks. Do you think there was a lesson learned over the past couple of weeks? I think it was I think it was a matter of sequencing.

20. The market believed that it would get the big bang. So, if you think of the five areas in that President Trump identified in the election, tariffs, deregulation, immigration, energy, and what it was and fiscal policy, those those five, the belief was that you would get a big bang so that the negative short-term impact of certain measures, tariffs, what's happening to the public sector, would be compensated by the positive impact of lower oil prices, deregulation, and a favorable tax regime.

21. So, so the assumption the market made was that you would get the big bang. Instead, you're getting a sequencing where the negative effects are being felt first, and the positive effects are promised in the future. And that's what the market's getting used to. There's a question as well about whether it's the Trump administration's goal to slow the economy.

22. And obviously, we've heard Treasury Secretary Scott Bessent talking about the desire to keep the 10-year yield as low as possible um so that the Fed cuts rates. How true do you think that is? So, I don't think they want to slow the economy to get the 10-year down. I think they want to get the 10-year down by favorable supply shocks.

23. That would bring the 10-year down um over the longer term. I think what they've realized is the difference between a journey and a destination. And that's why you've you're starting to hear about little disturbances. That's what President Trump called it. You just mentioned the Treasury Secretary, he called it said detox.

24. There's this notion that there may be some bumps along the way, but that the the pain is worth the gain down the road. And I think that is the new narrative coming out of Washington. And the marketplace is just understanding that the sequence of the these five measures um we talked about is not simultaneous, it's sequential.

25. Mohamed, we keep talking around all of this transformation, the transition that this administration wants to see for this economy. Um do you understand the vision of what they're trying to achieve? Like, what are we transitioning to? And is it worth it? Because clearly, they keep talking about pain.

26. The economy was doing pretty darn well before all of this started. Is this a pain that is worth inflicting to achieve whatever they're trying to achieve? So, I guess first, what are they trying to achieve? So, from what they've said, they're trying to achieve the following. A fairer trading system. So that US goods are not discriminated against in global trade.

27. Second, they want to detox the economy from its high dependence on the public sector. They want to shift from a public sector driven economy to a to more of a private sector driven economy. Third, they want to enhance the efficiency of government. They want to make government not just smaller, but more efficient.

28. And then fourth, they want to unleash the private sector through deregulation and favorable tax treatment. So that that is what they're aiming to do. So at the end of the day, what they're aiming for is a more efficient economy driven more by the private sector than the public sector that has operates in a fairer trading environment.

29. But as you said, getting there is hard. And if you hit stall speed, which is so to put numbers to this, last year the US grew by 2.8%. The consensus forecast for this year's growth is 2.5%. When we get the revisions, which we will, it would not surprise me if we go below below 2%. Somewhere below 1 and 1/2 to 2% is where we'll end up.

30. Stall speed is about 1%. So we're getting closer to small stall speed. And if we get to stall speed, then the journey becomes too difficult for the destination. And that's going to be the big question, Julie, as we look forward. And we haven't talked much about the Fed's role in all of this, but as we mentioned, you did write in a a commentary piece where you talked about um what you see as the need for the Fed to change its inflation target, to bring it up above 2%.

31. Um how urgently do you think they need to do that? Why do you think they need to do that? What what will that achieve? So let me just say they're not going to do this. In fact, Chair Powell has said it's not on the table. He doesn't want to even talk about it. I think that's a mistake. Um you've seen what's happened to surveys of inflation expectations.

32. They've gone straight up. The world understands, people understand that we are a structurally changing economy. We were even before tariffs. And we are now in a sort of turbocharged structurally changing economy. If you try to run monetary policy too tight, then you will get to stall speed. Um the the Fed becomes not a stabilizer, but a contributor to economic volatility.

33. And I think that is the main concern. Now, the good news is the Fed is saying one thing and doing the opposite. If the Fed truly believed that they could get to 2% on the inflation target in a timely manner, we would not be talking about how many cuts next year this year, we'd be talking about when is the next hike.

34. Um so I think the Fed is saying one thing and and pursuing the other. What I'd like it to do is over time transition to a more sustainable regime. Mohamed, do you think that fiscal policy will end up forcing the Fed's hand quick I mean Jay Powell has sounded very patient, but given the perils of potentially getting slowing to that stall speed, do you think the Fed is going to have to act and cut more quickly than it would otherwise?

35. That's certainly the market expectations. The market has gone from one cut this year to expecting at least three. So the market thinks that the employment part of its mandate of the Fed's mandate is going to force the Fed to cut. Um we're going to see CPI on Wednesday. We're going to have more more inflation data over the next few weeks.

36. Um we need stable inflation in order for the Fed to respond to the maximum employment part of its mandate. Otherwise, they're not going to deliver the three cuts. Mohamed El-Erian, thank you so much for taking the time here with us today, as well as our own Julie Hyman. A great to see you both. Thank you.