• This week, we want to talk about where we think the tariffs are going to take us, and when we would start to see the effects of that.
• Will it bring on a recession, and if so, when?
• What will the Fed do about it? How will the market react to it?
• President Trump gave the people the countries that had not retaliated a 90-day reprieve.
• Although, there is a floor of 10% tariffs on everyone.
• The 10% tariff is not enough to really move the needle in terms of consumer behavior, inflation, or causing a recession.
• However, if the tariffs are put into place that are significantly higher than 10%, plus, there’s no deal with China – which we think is likely – then what could happen is those tariffs could start to impact the economy.
• Normally, tariffs take two to three months to filter through the economy before we actually see their true impact.
• Two different things that can happen when there are tariffs.
• First, it could be inflationary because the things that you have to buy have gone up in price and there’s no way around it.
• However, many products have American alternatives, in which case there is no inflation because the price didn’t go up.
• So, depending on the consumer behavior, a lot of the inflationary impact will be absorbed by a change in consumer behavior.
• We’re not very worried about massive inflation, but also, inflation probably will be a one-time hit.
• If inflation is going to cause a recession, we’ll probably see it in the second-half of this year because not much is going to happen before July.
• We might see tariffs go back up again after July, because the 90-day deadline has passed.
• But then it will take two or three months to filter into the economy in terms of inflation, labor, etcetera.
• Therefore, we think the stock market will start to react to this in the second-half of this year.
• In the meantime, we will be facing a million headlines.
• Some people think that once the tariffs are done, the chaos will be over, but Donald Trump loves to be the center of the of the chaos, and we think he’ll be creating chaos for the rest of his term.
• We would say to the stock market: we’re going to be experiencing new headlines every week so get used to it.
• The Federal Reserve has a difficult task because they have dual mandates: employment and inflation.
• Their job is to keep inflation down and jobs up.
• In this environment, they could be contradictory.
• If we go into a recession, jobs could start to go away.
• If you have a recession, you want to lower interest rates, but that could cause more inflation.
• In our view, they are going to prioritize inflation.
• If they do, then the likelihood is that we won’t see the Fed lower interest rates until after July, if not later.
• So, what does that mean to you? Where do we go from here?
• We’re very glad that our sanity checks told us that the best option right now would be to not sell 100% of our equity position of all of our stocks and our high yield bonds.
• By hedging our bets, we’ve seen the market come back over the last few days and we’ve participated in that.
• If we see it go back down again, then we’ll be glad that we don’t have a full exposure to that as well.
• We think our bond portfolio should behave better as we get more clarity on which way interest rates are going to go.
• Right now, it’s too unclear.
• While we’re waiting, our bond portfolio is paying us a nice dividend.
• You don’t see it in the daily fluctuation in its price. But when the dividend gets paid, that’s when you see the value of your entire portfolio go up.
• We’re being patient and letting this thing play out.
• In the overall picture, we think we’re well positioned whichever way it goes.

Hello everyone and welcome to our market alert video for today, which is April 25, 2025. Thank you for watching. I hope that all you SCWPerS are out there in SCWPerS Nation SCWPering your tails off and enjoying your second childhood without parental supervision. And for those of you who are still not retired, I hope that we are going to get you there as fast as we possibly can. We want you to also become a SCWPer and we have a lot to talk about this week. There’s a lot to talk about, but there’s not a lot of data that came out to talk about. So basically, we want to kind of talk with you about where the tariffs are going to take us in our view, when we would start to see the effects of that. Will it bring on a recession, and if so, when? What will the Fed do about it? How will the market react to it? So we have all of that to talk about with you. So I can’t wait to dive into that with. One of the things that I wanted to share with you is that I just got back from visiting with my grandson in Austin and he’s 3 1/2 years old now, but he’ll be four in September, which is crazy, and he’s become quite the affectionate little guy, so I’m really starting to see the full fruits of being a grandfather also got to meet his little brother who’s only a month old and he’s a little cutie as well, so I guess I’m starting to get into that grandfather thing. Never thought I would say that. Anyhow, let’s talk about tariffs. And President Trump gave the people the countries that had not retaliated a 90-day reprieve, if you will. Although there is a floor of 10% tariffs on everyone and the 10% tariff is not enough to really move the needle in terms of the consumer behavior or in terms of causing a recession or inflation or any of those kind of things that all the doom and gloomers are concerned about. However, by July 4th we should know what you know these things are if they meet this deadline. This 90 day moratorium. And if those tariffs are put into place and they’re significantly higher than the 10%, plus, there’s no deal with China, which we think is likely. Then what could happen is those tariffs could start to impact the economy, because now they’re higher. And normally tariffs take two to three months to filter through the economy before we actually see the true impact of those and as you guys know, there’s two different things that can happen when there are tariffs, 1 is it’s inflationary because the things that you have to buy have gone up in price and there’s no way around it and that’s inflation. However, most of the things are not have to buy the example that we’ve given often is, you know if there’s 100% tariff on French wine and suddenly the price of a French bottle of wine from Bordeaux doubles in price. You could choose to still buy it, in which case you have inflation. Or you could choose to buy Napa wine, in which case there is no inflation because the price didn’t go up. So depending on the consumer behavior, a lot of the inflationary impact will be absorbed by a change in consumer behavior, so we’re not very worried about a massive inflation, but also, inflation probably will be like a one-time hit. It’s not going to be a continuous, you know increase, increase, increase. It’s a one-time hit and then everybody adapts to it. So, if inflation is going to cause a recession, we’ll probably see it in the second-half of this year because by before July, not much is going to happen. After July, that’s when we might see tariffs go back up again, because that deadline has passed. But then it will take two or three months to filter into the economy and to see what that means in terms of inflation, labor, etcetera, so. That kind of puts us into when will the market, the stock market start to react to this? Probably the second-half of this year. In the meantime, a million headlines, you know, Donald Trump loves to be the center of the of the chaos, hurricane or tornado. I mean, it’s unbelievable. I, you know, people think that once these tariffs are done, that the chaos is over. We think that President Trump loves to just create chaos. He he lives there, and so he’ll be doing it for the rest of his term for four years. We’re going to be experiencing, you know, new headlines practically every every week. So get used to it I guess is is what I would say to the market. Let’s talk about the Federal Reserve. So they have a a difficult task because what they have to do is they have two things right. They have the labor market employment and inflation. Those are their dual mandates. Their job is to keep inflation down and jobs up well in this environment with tariffs, they could be contradictory because we could go into a recession, which means jobs are going away, but we have inflation and if you have inflation, you lower interest rate, you you raise interest rates, but that could cause more joblessness. And if you have a recession, you want to lower interest rates. But that could cause more inflation. So they’re put in a difficult position. Our view is they are going to prioritize inflation and if they do that then the likelihood is that we won’t see the Fed lower interest rates probably until after July, if not later, because they don’t know which one is going to be the one they have to deal with at this point. And jumping the gun with all this uncertainty and all the stuff that’s going on will probably be not prudent. And so most likely we think the Fed will do nothing. So what does that mean to all of us in terms of, you know, where we are and where we go from here? Well, number one, we’re very glad. At this point that our sanity checks told us that the best option right now would be to not sell 100% of our equity position of all of our stocks and our high yield bonds. And so by hedging our bets, by having half of it sold and we retained half so far that has served us well. We’ve seen you know the market come back here over the last few days and we’ve participated in that. So right now, we’re very glad that we did that. If the if it turns the headlines turn bad. And we see it go back down again, then we’ll be glad that we don’t have a full exposure to that as well, so. We’ve we we feel very good about the the the way that our sanity checks helped us to make the decision as to whether we sell 100% or not. Now. Our bond portfolio we think should behave better as we get more clarity on which way interest rates are going to go. Right now, it’s too unclear. There’s no way to know because of what I described earlier. So and then while we’re waiting, our bond portfolio is paying us a nice dividend. You don’t see it in the daily fluctuation in its price. But when the dividend gets paid, that’s when you see the value of your entire portfolio go up because of that. So be patient. Let this thing play out. Let us get the gray hair for you so that you don’t have to. That’s our job. So I hope that this discussion gives you some context, some clarity. It’s difficult to predict what’s going to happen, but you know, with Donald Trump, our view of Donald Trump is that he, he doesn’t, he doesn’t plan way ahead. He’s kind of a gut player in our view, he he wants an outcome he hasn’t planned, he does something. And then he kind of plays it by his gut after that. And so to predict Donald Trump’s gut is is practically impossible because he’s playing it based on how it’s coming his way. And so only that only time will tell. But in the in the overall picture, we think we’re going to be OK. We’re well positioned whichever way it goes. And so I hope, as I said that it gives you Peace of Mind. So once again, I hope this video finds you healthy, wealthy and wise and all you SCWPerS, I hope you’re out there enjoying your second childhood without parental supervision, not worrying about this and those of you who are on your way to becoming a SCWPerS, that’s our job is to get you there and to keep you there. Once you arrive at your retirement. So again, please like and subscribe to this video, it really helps us out a lot. Make sure you share it with your friends and family. Send them our way. People are scared right now. And you know, they’re they’re feeling very uncomfortable. And we’d like to help them if we can. So remember kind of keep it in your head. If somebody talks to you about oh, no, what’s going on? Send them our way. We’ll talk with them. We’ll treat them well. OK. So again, thanks for watching and we’ll talk soon.

Please note: transcript has been modified after the time of recording. 

Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of Ken Moraif, CEO and Founder of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2023