Tariff uncertainty is creating a surprising trend in retail.
Transcript:
ED YARDENI: Well, that’s the thing I think consumers are very nervous. You see that in the so-called soft data which is survey, survey based indicators of consumption. And they all look terrible and totally inconsistent with the strength of retail sales. But again, I think the consumers are spending before prices go up as a result of the tariffs. The problem we have with the tariffs is nobody really knows what the deal is because the President is prone to postpone these tariffs, change his mind on some of these things. So we may see that within 90 days, which is when a lot of the tariffs have been postponed. There might be deals. And all this concerns the prices are going to go up a lot may be misplaced. And that would give us a better second half of the year.
Right now everybody is expecting higher prices and that the consumer will go off a cliff in the second half of the year. That’s that’s not necessarily going to happen. And meanwhile, we’re seeing energy prices. Oil prices are down. Gasoline prices are down. That’s a big savings for a lot of us because people do drive a lot. And they can save a few thousand a year. So the consumer spending notwithstanding the depressed surveys of consumer sentiment. And they may surprise us going into the second half of the year. But that assumes that the tariffs will be negotiated away and we won’t get a lot of price increases as a result of them.
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