'It's Going To Get Worse' For Both The Economy & Stocks | Peter Tchir

**SPEAKER_1** (0:01)
This episode is brought to you by Diet Coke.

**SPEAKER_2** (0:03)
You know that moment when you just need to hit pause and refresh?

**SPEAKER_1** (0:06)
An ice cold Diet Coke isn't just a break. It's your chance to catch your breath and savor a moment that's all about you. Always refreshing, still the same great taste.

**SPEAKER_2** (0:15)
Diet Coke, make time for you time.

**SPEAKER_1** (0:19)
The Jack Welch Management Institute at Strayer University helps you go from, I know the way, to I've arrived with our top 10 ranked online MBA. Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to made it happen and keep striving. Visit strayer.edu/jackwelchmba to learn more. Strayer University is certified to operate in Virginia by Chev and as many campuses including at 2121 15th Street North in Arlington, Virginia.

**Peter Tchir** (0:48)
So I'm a little bit worried the state of the economy has not been great and that's going to get worse and I think March financial markets have got ahead of themselves especially if tariffs come through.

**Adam Taggart** (1:02)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. Early this year, the market sold off rather violently on fears that President Trump's new tariffs would send global trade into a tailspin. Well, fast forward three months and stocks are back to all-time highs, even as it's becoming clear that these tariffs, in some shape or form, are here to stay. So, are tariffs not the great mistake that Wall Street originally thought they were? Or have investors just simply decided to stop worrying about them? To discuss, we're fortunate to welcome to the program, Peter Tchir, Head of Macro Strategy at Academy Securities. Peter, thanks so much for joining us today.

**Peter Tchir** (1:41)
Thanks very much for having me.

**Adam Taggart** (1:43)
Well, Peter, it's a real pleasure. I read your work. You publish at least an article a week, I think. But I very much appreciate each one of those articles when they come out, and I'm very happy to finally have the pleasure to get to interview you virtually in person here. Thanks for joining us here on Thoughtful Money. I think you and your firm offer, I think, a differentiated outlook, and we'll talk in just a moment about some of the unique aspects of Academy Securities and the competitive advantages that it may offer its investors, at least on certain dimensions. But since you're new to the program, I thought it'd be great if I could just start with one of those famous general kickoff questions that folks know me for. What's your current assessment of the economy and the financial markets?

**Peter Tchir** (2:37)
That's a great question. So I think right now in the introduction, you talked about tariffs. I feel we're at almost a crossroads right now. What I would love to see the administration pivot to is what we've been calling national production for national security. Besant earlier this week was on Bloomberg TV. He didn't quite say it exactly that same way, but he's talking about that. To me, this is really investing and building out the things that we need to be competitive and to be safe as a nation. So I would say chips are included in that. Certain pharmaceuticals are included in that. Rare earths and critical minerals, not so much the rare earths and critical minerals themselves, but the processed and refined versions of that. So that's what I'd love to see. I think it was two weeks ago now that the Department of Defense invested money directly into MP as the ticker symbol. They also provided $1.1 billion of debt financing. So those are the things I would like to see the administration pivot to. I think we put up a lot of regulation to get on our own way in the past 20 years. We had the luxury of doing that where we were the sole superpower. I think this is something that should be reinvestigated. Do all these regulations make sense given the current economic conditions as competition with China? I think that's something Trump would be great at doing.
The scary part is we seem to be heading to elevated tariffs. We're hearing about deals with Japan, 15 percent. There's been chatter. Europe might get 15 percent. I think the market thought 10 percent was maybe a worst case, and maybe countries would come in with better deals. I'm a little bit worried that two things are going on in tariffs. We're seeing the benefits initially, which we're getting the tariff revenue, which is actually helping with the deficit. We're not getting this inflation, or you have to look very closely for the inflationary aspects. If you look at things like food and vegetables, no inflation there, canned food and vegetables, inflation because of the price of the can. But the reality is, my view is always going to be, it's going to take six months or so for the inflation to work its way through the system. You have to get the orders that come in, they have to have inflation. You're going to spend time negotiating with your exporter, hey, we need a price cut. You're going to bear some of this, and it certainly also means that no one wants to do much whether so much uncertainty, whether it's going to be 10%, 20% or zero. All the people are doing a victory lap saying, hey, tariffs worked, everyone was wrong. I think they're going to be proven to be incorrect, that if we go down this path, we start adding 15% tariffs across the board, some individual things higher, we're going to see a slowdown in the economy, and I already think the economy has been a bit weak away from the data centers, and more and more what I'm being told, and this is really resonating with me, is hiring for people recently graduating college or if you're in college or prospects getting out of college, all of a sudden look very dim because that seems to be the area companies are saying, well, that we can try and replace with AI, we can try and replace entry level accounting with AI. We don't need four analysts doing pitch books, we only need one. I'm a little bit worried the state of the economy has not been great, and that's going to get worse, and I think financial markets have got ahead of themselves, especially if tariffs come through.