Slides: The 1970's Stagflation Analog

Commodities and Trump 2.0

Backdrop:

MUFG was bearish commodities (Oil was one of those) for 2024 with Gold as their only exception. Turns out there were correct. Here they are calling for stagflation effects. This year their headline is stagflation risk. The ideas lean more “Stag” than “Flation”. It almost seems they are recession-biased with gold as a hedge for a rate cut or two this time.

Tariffs are textbook stagflationary

• Three months into the new US administration and Trump 2.0 policies have been nothing short of dizzying.

• President Trump has imposed towering tariffs on all countries. These tariffs have a distinctly stagflationary flavor. They push up import prices that then pass through into higher consumer goods prices and inflation — acting as a tax on spending and, thus, creating a corresponding drag on economic growth.