Tariffs still have not hit economy in a meaningful way. Most companies stockpiled inventories before the so called "liberation day." So it will take even longer for higher priced tariff goods to hit economy. It is starting slowly thus month, but most will begin hitting in July/Aug/Sep.
Just a few weeks ago, the World Bank reduced Global GDP growth. For the U.S., they took it down about a full percentage point. They reduced 2025 U.S. GDP growth from a sluggish 2.5% down to an anemic 1.6%. That is good news if accurate (and the World Bank is leading authority on mon-partisan projretions) in that a recession would be avoided if accurate. However, 1.6% is NOT enough to support the very high Zo/E ratios in the U.S. stock market right now.
Bessent thought he made a clever rebuttal in his congressional testimony yesterday. He stated. "You are cherry picking about companies raising prices. You mention Target will increase prices, but other retailers will not."
That is not quote the zinger he thinks it is. While trueness that if some companies eat the increased cost, that will negate some inflationary effects. However, that just means corporate profits are squeezed and those companies react in different ways, increased layoffs, or their stocks tank on reduced earnings. One way or another, Americans pay for it through higher prices, or corporate earnings declines (layoffs and stock declines).
