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Current Inflation a 'Function of Previous Policy': Joe Lavorgna
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March 28, 2025
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5:07Now PlayingJoseph Lavorgna, chief US economist at SMBC Nikko Securities and chief economist at the National Economic Council in Trump’s first administration, said the underlying data about the economy still looks, though inflation remains a problem.
US stocks tumbled Friday as risk assets were pummeled by everything from renewed tariff concerns to signs that inflation remains sticky while consumer sentiment and spending wobble.
That spate of macro worries landed in a market already under stress in the one area it can least afford: tech. Investors ramped up their selling of the winners from the past two years, unloading the likes of Nvidia Corp. and its Magnificent 7 cousins, along with profitless tech companies and erstwhile darlings like Palantir Technologies Inc. and Reddit Inc. The highly anticipated trading debut of cloud computing firm CoreWeave Inc. priced below expectations, adding to woes in the IPO market.
The S&P 500 Index tumbled 2% as of 1:10 p.m. in New York, with 10 of 11 industries lower. Selling was heavier in the Nasdaq 100 Index, where losses topped 2.5%. Both are down at least 6% in March and careening to their worst quarterly performances since 2022. The Cboe Volatility Index jumped above 20. The yield on 10-year Treasures sank to 4.27%, and gold climbed to around $3,118 an ounce.
The S&P 500 fell as much as 10% from a February record earlier this month as markets braced for President Donald Trump’s plan to upend global trading with punitive tariffs. Some of the selling eased amid signals the levies slated for April 2 wouldn’t be as deep or broad as threatened, but an unexpected move against car imports exacerbated worries. Economists say tariffs will almost surely raise consumer prices and harm economic growth. Measures of consumer sentiment have been deteriorating, with the latest on Friday showing elevated expectations for inflation and muted optimism about growth.
“Investors are still on edge about tariffs. It’s that simple,” Dan Greenhaus, Chief Strategist, Solus Alternative Asset Management. “In an environment of such uncertainty, people are focusing in on worst case outcomes and choosing to derisk, especially after such a terrific run for risk assets. I don’t think its much more complicated than that.”
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