One of the 'weirdest economic data periods ever' is in the cards

Peter Tchir dissects all the headwinds and tailwinds facing the American economy.

Transcript

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.