By coinnews 
00:00 Speaker A
We are gearing up to hear President Trump speak about this potential US and UK deal. But Roger, from an economic perspective here,
00:11 Speaker A
where is your head at when it comes to the US economy potentially slowing off the back of these tariffs? If we start to get deal making headlines in from a country like the UK, for example, does that move the needle for you on your outlook for the US economy at all?
00:27 Roger
Yeah, great to be here. Um, well, um, obviously, we’re we’re tracking the the headlines and the news very closely to see if we need to revise our our expectations for the year. But the but the reality is that there is some level of of uncertainty that has been already injected in the system. Uh, and probably will will be very difficult to undo even if we an announcement is made, right? Um, the level of tariffs we’re talking about uh, with the UK, for example, 10% versus carbouts on cars or steel, um, may not materially really impact the that little general level of tariffs that we have. So, we have these uh, 0.8% growth for the year, um, considerably slower, no recession. But, uh, is it will depend really a lot about deals achieved with with China, mainly, and with other countries for for that picture to change dramatically.
01:57 Speaker A
And, Roger, my guest host, Keith Lerner, has a question for you.
02:02 Keith Lerner
Yeah, thanks so much. I was just curious. I mean, the big debate in the market right now is this kind of divergence between the hard data and the soft data. It sounds like you’re at 0.8% GDP. So, that would that would lead me to suspect that you think that we’re going to have a convergence to the downside with the the soft data leading to the hard data following suit shortly. And, if so, when do you expect to see that in the numbers?
02:48 Roger
Yeah.
02:48 Keith Lerner
Yeah.
02:49 Roger
Yeah, absolutely. Yeah, um, I I think what happened with tariffs is that, um, clearly, you don’t see it in the in the activity data yet. So, the the hard data, when you see, even high frequency, uh, indicators, uh, like retail tracks and consumer spending, and things that you you don’t see until later, um, the first place where you’re going to see the impact of tariffs is on the price side, on inflation shock. So, we’re really keeping a close eye on on things like PPI and and import prices versus CPI, um, and also on tariff revenues because that’s the clear evidence that tariffs are actually impacting imports import activity. So, we’re going to see that price shock first. That price shock, in turn, is going to impact the purchasing power of the consumer, and that is going to eventually turn into a slowdown in in activity data and in consumer spending data more towards the back end of the year.
04:23 Speaker B
Would you would you expect as we move past some of this, maybe even if if it’s by the end of the year, that we actually then see a bit of a kickback, or move back up next year? Or are you thinking that this is going to be prolonged where we have that slow economic environment today, and that next year, we’re still going to run around 1% or less?
05:03 Roger
No, um, this is the thing with with tariffs. Um, there is this one, um, off shock, but on the price side and on the on the spending side. Once, um, the the tariffs are set at that level, you could, basically, in terms of growth rates, right? In terms of the how fast the economy is growing, you can have a a 2026 where the economy is going back to something closer to 2%. Um, of course, the uncertainty will continue, basically hindering the the activity and the investment decisions, right? Because even if you achieve a bilateral agreements, um, you never know when those terms of the agreement, or the enforcement commitments under of that agreement are are changed, right? So, the uncertainty is something that may continue underlying. But, you could you could see how activity will go back even though levels of activity, right? Like the the consumer spending levels are not recovered. The growth rate next year of the lower base could actually become more normal. Same with with inflation. Same with inflation, right? So, we see inflation, perhaps, jumping to something like high threes this year. Next year, you could well see inflation going back down, not because prices have decreased, but because the inflation rate is actually normalizing.