Following the latest round of tariffs, it’s only a matter of time before the other economic shoe drops, according to one investor who predicted the 2008 stock-market crash.
Danny Moses, the founder of Moses Ventures who was made famous by the book-turned-movie “The Big Short,” warned that despite some strong economic indicators in the face of tariff uncertainty, signs of stagflation are already upon us.
“There’s just so many moving parts right now that it’s really hard to decipher where you’re going to pinpoint,” Moses told Fortune. “Anyone can find a data point that says it’s inflationary, and someone can find a data point that says it’s not. So it’s just difficult. But bottom line… Is the [economy] going through a stagflationary period? It appears to me, it is.”
“Nobody knows how this is going to pan out, because this type of thoughtless tariff is unprecedented,” Moses said.
White House spokesperson Kush Desai told Fortune in a statement that recovering growth and “cooling inflation” “suggest stagflation is simply the latest buzzword for panican [sic] paranoia.”
“Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen,” Powell told reporters following the Fed meeting on Wednesday. “A reasonable base case is that the effects on inflation could be short-lived—reflecting a one-time shift in the price level. But it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed.”
“Pick your poison,” Moses said. “It’s either going to hit corporate margins and earnings will go down, which means the market’s expensive, or it’ll be passed on to the consumers and be inflationary. I think it’s going to be a combination of both.”
