Billionaire hedge‑fund manager Bill Ackman expects Washington's trade fight to fade quickly, stating that tariffs will amount to "a one‑time reset" rather than a new wave of inflation.
What Happened: “The important thing is the tariffs get resolved in the relative short term,” the Pershing Square CEO said, speaking at CNBC's “Squawk Box”. “If we're still dealing with the tariff thing as major headlines, that uncertainty will weigh on Q2.” Ackman argued that higher import duties would lift some prices, but unlike runaway inflation, the bump would not “compound.”
He sees a softer economy already taking shape. “I think inflation has largely been wrung out,” Ackman said, pointing to falling egg and energy costs. With price pressures cooling, he believes the Federal Reserve could begin trimming rates "toward the end of the year,” adding that “a small cut relatively soon … makes sense.”
Ackman blamed early‑year strength on “front‑loading of purchases” as companies tried to beat the Trump administration's 145% China tariff. “Liberation Day” uncertainty, he said, prompted many firms to pause spending, momentum he expects to show up in second‑quarter data.
See also: US Dollar Depreciation Is Cushioning ‘The Impact Of Tariffs On Corporate Profits,’ Says Expert
On China policy, the investor urged a tempered approach: “The right thing to do is we pause on China -- maybe 180 days," giving both sides room to strike a deal while U.S. companies shift supply chains.
Ackman has long criticized the Fed for keeping rates too high and famously placed a bet on falling Treasury yields in 2023. He says the bond market already senses a cooling economy this time, leaving policymakers little reason to wait.
Why It Matters: Ackman, last week, urged Trump on X to suspend China tariffs, saying they saddle U.S. firms with higher costs and drain Washington's leverage at the bargaining table. A pause, he argued, would flip the pressure onto Beijing because "every U.S. business is already moving its supply chain and manufacturing out of China."
Ackman, who once endorsed Trump yet now brands the duties an "economic nuclear winter", issued the plea days after the White House hiked China levies to 125 percent while granting a 90‑day reprieve to non‑retaliating nations. He warned that smaller companies, lacking the cash buffers of multinationals, could buckle under prolonged tariffs, undermining the economy Trump aims to shield.
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