“Goldman Sachs had stated that up to 50% of the tariffs are going to be absorbed by consumers.” – 03:18

Kerim Kfuri, the President and CEO of The Atlas Network, joins Remy Blaire to discuss the current state of global trade amid escalating tensions between the U.S. and China, which have led to significant fluctuations in the stock market.

Remy begins by highlighting the resilience of global supply chains, which continue to hold steady despite the challenges posed by tariffs, geopolitical friction, and the concept of de-globalization. She references the DHL and NYU Stern’s global connectedness tracker, which indicates that companies and countries are managing risks effectively and not retreating from international business. Kerim emphasizes the importance of trade diversification as a critical strategy for mitigating risks in a turbulent economic environment.

As the discussion unfolds, Remy and Kerim delve into the implications of recent market pullbacks, particularly in light of the ongoing government shutdown and the potential for new tariffs. Kerim explains how businesses are responding to this uncertainty, noting that many are stockpiling inventory to prepare for the impact of tariffs. He advises consumers to be strategic in their shopping, as some businesses may have overstocked and could offer discounts.

The conversation shifts to the broader implications for American companies, including small businesses that make up a significant portion of the economy. Kerim, a self-proclaimed supply chain optimist, encourages businesses to seek opportunities within disruptions. He advocates for cost engineering and agility, urging companies to adapt their supply chains to offset increased tariffs and enhance profitability.

As the segment nears its conclusion, Remy asks Kerim about the concerns of stakeholders regarding global trade. Kerim highlights the need for negotiation and resolution, cautioning against overly punitive measures that could ultimately burden consumers. He stresses the importance of communication and collaboration in navigating the complexities of international trade.

“The U.S. is like, you escalated, so we are going to escalate. China’s like, no, you did it first, so we are going to escalate.” – 02:24

Sonu Varghese, VP, Global Macro Strategist at Carson Group, joins Remy Blaire to discuss the current state of the equity market, which has been exhibiting notable volatility. The market’s erratic behavior is likened to Christmas tree lights, fluctuating between red and green as it responds to various economic signals. Remy highlights Federal Reserve Chair Jerome Powell’s recent remarks, indicating that the central bank is likely to cut interest rates again later this month, despite persistent inflation and a weakening job market.

Sonu elaborates on the macroeconomic factors contributing to the market’s volatility, particularly the ongoing trade tensions between the U.S. and China. He notes that the S&P 500 has experienced a remarkable 35% increase over the past six months, suggesting that the current bull market, which began on October 12, 2022, is showing strong momentum. Sonu expresses optimism that this bull market may continue into its fourth year, historically associated with positive returns.

The conversation shifts to the Federal Reserve’s dual mandate of maintaining stable inflation and maximum employment. Sonu articulates his belief that the Fed will proceed with rate cuts in October and potentially again in December, prioritizing the protection of the labor market amid rising inflation concerns.

Remy and Sonu then explore the burgeoning field of AI-related investments, which are beginning to mirror the growth patterns seen during the dot-com boom. Sonu points out that AI spending now constitutes over 4% of GDP, significantly contributing to economic growth. He discusses the intricate relationships forming between companies like OpenAI and major tech firms, illustrating how these partnerships are driving investment and innovation in the AI sector.