Peter Tchir dissects all the headwinds and tailwinds facing the American economy.
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00:00We're at one of the weirdest economic data periods ever.
00:03I talked to one midsize bank recently, and they said they had the two highest weeks of
00:07auto loan applications.
00:09And I think their view is everyone wants, if you're going to buy a car, you want to
00:12buy it now because you don't understand the uncertainty.
00:14So you've had all this demand pulled forward.
00:16So the economic data doesn't look that bad.
00:18But it's really hard to decipher how much of that's an ongoing strength, how much of
00:23this is pulled forward.
00:24And when I take a look at where we were a couple months ago, I think the underlying
00:28trends were already a little bit negative.
00:30You're seeing homes for sale increase in Florida.
00:32We're now well above 2016 levels.
00:35I think even in Texas, you're approaching pre-COVID levels.
00:38So some of the areas that everyone was moving to seem to be under a bit of pressure.
00:41You're seeing delinquency rates creep higher.
00:44I think the Fed is going to be forced to react, but I don't think they can really, maybe they
00:49cut 25 in May just to get something on the table.
00:51But you really are struggling with the potential for supply shortages, the potential for inflation
00:57shocks.
00:57Because I agree, if you bought in a bunch of stuff, say, ahead of the tariffs, you're
01:02now sitting here probably not buying any more inventory, hoping that the tariffs go away.
01:06But if the tariffs are here, will you be able to order inventory in time?
01:10So I think we could see a little bit sort of COVID type shocks where we, you know, you go
01:14to the store and all of a sudden there's a run on toilet paper because no one was importing
01:18the pulpwood needed to make the toilet paper.
01:20And I think that will be very disruptive.
01:23And I think China did learn one thing under the Biden administration.
01:26The U.S. does not live with inflation very comfortably, very long.
01:29So they kind of have that.
01:32And yeah, I think they're going to have to cut three or four times, but I think they're
01:35going to be bad cuts because I think the economy is going to slow and they're going to be somewhat
01:39handcuffed because you are going to see these price increases at the same time you're seeing
01:43an economic weakening.
01:44So maybe I'm surprised when we get all these good trade deals and this all, you know, mellows
01:50out or Trump, you know, pivots, which he could do into some of those things we talked about
01:54earlier.
01:54Hey, let's focus on subsidies.
01:55Let's focus on guaranteed contracts from the government, things that are within our hand
01:59that don't alienate the rest of the world.
02:01Then I'd be positive until then.
02:03I just don't see this playing out.