'Tariff Roulette' Causing Uncertainty: DoubleLine's Sherman

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00:00When you think about the inflation data, if you dig into the pieces there, what you've seen is

00:04core goods start to contribute positively to inflation again. And, you know, over the last

00:0915 years or so, it's primarily been a drag on inflation. So some of that is the tariff policy

00:14coming through. And secondly, what I'd like to point out on the tariff policy is that we've seen

00:19the administration rave about how much revenue they've generated in the last like 30 days or so

00:24based on the tariff policy. And so I think the run rate right now, if you if you analyze the

00:29monthly data is around roughly $340, $350 billion. And so what that tells me is that not necessarily

00:36we've had a successful policy yet, but ultimately the inventories that are being built today are

00:41predicated on this new tariff policy. And so what that is, is that the already announced tariffs.

00:47Now we've also seen pharmaceuticals come in the mix. We've seen recently home furnishings. Now

00:52there's the threat of China again, there's semiconductors again. So this is the ever

00:56evolving kind of tariff roulette, where no one really knows what the policy is. But we do know

01:02that we do have these baseline tariffs. And so I think it's too early to say that the inflation has

01:07been contained off of off of the tariff policy. And I think we're just starting to see the semblances

01:12of it. Now we're going to get, you know, third quarter earnings coming up. And unfortunately,

01:17I don't think you're going to see a lot of that tariff pricing in there yet, whether or not it's

01:21being absorbed at the margin level, where it exists in the supply chain, or if it gets passed

01:25to the end consumer. So bringing this all back together, I think the jury's still out for the

01:30next three to six months on whether or not we're going to see these inflationary impulses. And I

01:34think that also puts the Fed in a more cautious position, though I agree with Mr. Diamond on if

01:40there's degradation in labor, they will move quickly.