Sonu Varghese
Tariffs Will Likely Put the Fed in a Tricky Spot
Liberation Day is here, but we’re still waiting to for the exact nature of our liberation. Will it be reciprocal tariffs, with the US reciprocating other countries’ tariff rates on US goods? These will be enormously complicated to implement. Or will it be President Trump’s preferred approach of imposing a blanket 20% universal tariff on …
Sonu Varghese
April 2, 2025
Consumers Expect Stagflation, But Here’s Why That’s Unlikely
It’s not surprising that consumer sentiment has plunged over the last two months amid all the market volatility, and headlines around tariffs and layoffs (even beyond the federal government). Two popular surveys of consumer sentiment, from the University of Michigan and The Conference Board, have seen sentiment more than reverse all the gains made in …
Sonu Varghese
March 21, 2025
The Fed Is Stuck Waiting, and That’s a Problem
The Federal Reserve (Fed) opted to keep their policy rate unchanged, leaving it at the 4.25-4.5% target range. This was not unexpected, but all eyes were on the Fed’s “dot plot,” which is their Summary of Economic Projections. It’s updated every three months and contains individual member estimates of the federal funds rate over the …
Sonu Varghese
March 20, 2025
Why Germany’s Epic Announcement May Be a Potential Game Changer for the Global Economy & Markets
Over the last month, the market conversation has been so dominated by tariffs that it’s been hard to tune into anything else happening in the global economy. This is not to say that the newly implemented tariffs are insignificant—as I wrote recently, the tariffs are unprecedented and a big deal. But their impact on the …
Sonu Varghese
March 18, 2025
No Recession in Sight for the US Economy, but No Cyclical Acceleration Either
The February employment report was a bit mixed. It didn’t tell us much that is new about the US economy, but that in and of itself is a story, depending on your expectations: If you were expecting near recession-like conditions, we don’t have that If you were expecting GDP growth to be closer to 3% …
Sonu Varghese
March 7, 2025
Ten Questions on Tariffs, the Economy, Markets, and Our Outlook
Ok, tariffs happened. But now what is the big question—for policy, the economy, and obviously, markets. Here are Carson Investment Research’s answer to 10 key questions. One: What tariffs went into effect? At 12:01am on March 4th, new tariffs on Canada, Mexico, and China went into effect. These included: 25% tariffs on all Canadian …
Sonu Varghese
March 5, 2025
Wait, Is GDP Growth Really Going To Be Negative in Q1?
Even as the world’s attention last Friday was focused elsewhere, we got a real doozy of a data update in one corner of the economic universe. The Atlanta Federal Reserve’s Real GDP “Nowcast” for Q1 plunged from 2.3% to -1.5%, and then down to -2.8% after more data on Monday. Yeah, that’s not a typo, …
Sonu Varghese
March 4, 2025
Lessons From Buffett: Dividends Are Tax-Inefficient, and Hurts Compounding
“In a very minor way, Berkshire shareholders have participated in the American miracle by foregoing dividends, thereby electing to reinvest rather than consume.” – Warren Buffett, Berkshire Shareholder Letter, 2025 The quote above is from Warren Buffett’s latest missive to Berkshire shareholders, and as usual, it does not miss. There are several nuggets of wisdom …
Sonu Varghese
February 25, 2025
5 Reasons Why We’re Not Worried about Rising Credit Card Debt
Every quarter the New York Federal Reserve releases its household credit and debt report and we get a flurry of headlines about rising credit card debt, and rising delinquencies. As always with these things, it’s important to maintain some perspective. One: Household Leverage is Actually Reducing Credit card debt rose 3.9% last quarter (Q4 2024) …
Sonu Varghese
February 21, 2025
DC, We Have a Problem
Over the last two years, markets have been able to tune out a pretty dour national mood, with the S&P 500 gaining 25%+ in 2023 and 2024. In fact, real GDP growth clocked in at 2.9% annualized over the last two years, above the pre-pandemic trend. Sentiment was downbeat, but this didn’t really crimp consumer …
Sonu Varghese
February 13, 2025