Summers: The White House Can't Have it Both Ways

Ladies and gentlemen, let me tell you something: the White House is playing a dangerous game with the economy. They're trying to have it both ways, and it's not going to work. Let's break it down.

First, let's talk about inflation. The White House is bragging about how core consumer prices have dropped to their lowest level in four years. That's great news, right? WRONG! Federal Reserve Chair Jerome Powell just dropped a bombshell: the new tariffs are going to send inflation soaring and slow down economic growth. BOOM! That's a one-two punch that could knock out any progress we've made.

Now, let's talk about deregulation and energy dominance. The White House is touting massive investments in manufacturing and energy. GE Aerospace is pouring $1 billion into U.S. manufacturing, creating 5,000 jobs. Asahi Group Holdings is investing $35 million in Wisconsin. Merck is opening a $1 billion facility in North Carolina. That's all fantastic, but here's the catch: businesses are holding off on new investments because of the uncertainty caused by these tariffs. So much for that growth, growth, growth!



And let's not forget about the global impact. The new tariffs have sent shockwaves through the global economy, prompting retaliatory moves by China. Powell himself admitted that the full impact of these tariffs isn't clear yet, and the Fed is staying on the sidelines. That's right, folks—the Fed is waiting and seeing, just like the rest of us. But here's the kicker: J.P. Morgan Research has raised the probability of a global recession to 40% because of all this trade policy uncertainty. Are you kidding me? This is a recipe for disaster!

Now, let's talk about consumer and business sentiment. Consumer confidence is at a three-year low, and business sentiment is taking a hit. The Fed's regional surveys show a stepdown in U.S. capex spending intentions. That means businesses are pulling back on investment and hiring. This is a nightmare scenario for the economy, and the White House is playing with fire.

So, what does all this mean for investors? It means you need to be cautious. The White House can't have it both ways—you can't have deregulation and energy dominance without dealing with the fallout from these tariffs. The market hates uncertainty, and right now, there's plenty of it to go around.

But here's the thing: there are still opportunities out there. The manufacturing and energy sectors are poised for growth, and you can capitalize on that. But you need to be smart about it. Diversify your portfolio, stay balanced, and don't get caught up in the hype. This is a no-brainer: you need to be prepared for the worst while hoping for the best.

So, buckle up, folks. The White House is playing a dangerous game, and it's up to us to navigate these choppy waters. Stay informed, stay vigilant, and most importantly, stay invested. Because in the end, the market will always find a way to surprise us. And you don't want to miss out on the next big thing!