6 days Ago By Kaustubh Bagalkote
Cliff Asness , Chief Investment Officer at AQR Capital Management , criticized proponents of tariffs Thursday, challenging claims that tariffs lead to deflation rather than inflation. What Happened : “Idiots say this and bray like they’ve scored a great point,” Asness wrote on X. “What they mean is giant arbitrary tariffs are so bad they eventually cause recessions which then cause deflation.
They then present this as a feature.” His comments came in response to Anthony Pompliano , Founder & CEO of Professional Capital Management and Bitcoin BTC/USD bull, who had said, “Tariffs don’t create inflation. The exact opposite happens.
” The exchange occurs as JPMorgan Chase & Co. recently raised its U.S.
recession probability to 40% from 30%, citing President Donald Trump ‘s trade policies as a key factor. According to JPMorgan’s chief global economist Bruce Kasman , upcoming trade measures would lift effective U.S.
tariff rates above 10%, potentially cutting 0.5 percentage points from both global and U.S.
GDP in 2025 . Kasman identified three key risks: eroding investor confidence, disruptions to supply chains, and constraints on the Federal Reserve’s ability to counteract damage through monetary easing. “The combination of higher inflation and weaker employment growth creates a dilemma for the Fed,” noted Michael Feroli , JPMorgan’s chief U.
S. economist. See Also: Mark Cuban Warns Of Price Hikes, Says ‘Buy Consumables Now,’ Before Retailers Blame Tariffs Why It Matters : Cryptocurrency betting markets reflect growing concerns, with Polymarket showing the odds of a 2025 recession jumping from 46% to 54% in just 24 hours following Trump’s “Liberation Day” tariff announcement.
Over $1 million has been wagered on this outcome . Not all experts share the pessimistic outlook . Ark Funds CEO Cathie Wood continues to forecast a “deflationary boom” for the second half of 2025, arguing that the market is pricing in “the last leg of a rolling recession.
” Meanwhile, veteran strategist Ed Yardeni has reduced his odds for his bullish “Roaring 2020s” scenario from 65% to 55%, raising stagflation probability to 45% amid concerns that tariffs will squeeze corporate profit margins and push inflation higher. Read Next: Kevin O’ Leary Says By 33, You Should Have $100,000 Saved ‘Somewhere’ — ‘That’s the Age When it’s Really Time to Start Getting Focused ‘ Image via Shutterstock Disclaimer : This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. © 2025 Benzinga.
com. Benzinga does not provide investment advice. All rights reserved.
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