Billionaire hedge fund manager and New York Mets owner Steve Cohen has been erratic in the US economy, growing in the second half of the year due to tariff concerns, stricter immigration policies and reduced government spending led by Elon Musk. warned that it was set to be slow.
The founders of Point72 Asset Management warned that sustained inflation, slowing growth and a brewing trade war could strike the US economy in the coming months.
“I've actually been pretty negative for the first time in a while.” Cohen said Friday at the Institute of Future Investment Initiatives in Miami Beach.
“It may last for about a year, but it's definitely a time when you think you've made the best profits and you won't be surprised to see any significant fixes.”
Cohen's net worth is Valued by the Bloomberg Billionaire Index It had a swing at the Elon Musk-led Office of Government Efficiency (DOGE) at $14.8 billion as of Monday, calling it an austerity initiative that could reduce momentum.
However, Cohen was particularly defensive of tariffs.
He warned that escalating trade measures could lead to a hardball retaliation game with key trading partners.
“The tariffs are not positive. It's taxes,” Cohen said.
“And if the US is equipping someone with taxes, they'll probably raise interest and raise taxes.”
The White House has framed tariffs as a strategy to balance trade and strengthen America's negotiating position, but the latest economic scorecards are not promised.
US business activities expanded this month at the slowest pace since September 2023.
As the economy faces uncertain stretches, Cohen's warning suggests investors should support it because of a potential slump.
The US economy has grown at an annual rate of 2.3% over the past three months of 2024, slowing from the 3.1% growth seen in the last quarter.
This DIP was primarily due to companies cutting investments and increasing trade deficits. In other words, the country imported more than exports.
However, one bright spot was consumer spending, up 4.2%. This is the biggest increase since early 2023.
This suggests that Americans continued to spend their money despite economic uncertainty. For the full year of 2024, the economy expanded by 2.8%, slightly below the 2.9% growth rate recorded in 2023.
Inflation, or price increases, were also picked up towards the end of the year.
The expected Federal Reserve inflation rate rose to 2.3% per year in the fourth quarter, up from 1.5% in the last quarter.
This raised questions about whether the Fed could continue to adjust interest rates and manage inflation in the near future.
Looking ahead, experts predict that economic growth could slower and could immerse themselves in under 2% in early 2025.
Factors that contribute to this uncertainty include ongoing trade conflicts, changing government policies, and global economic challenges.
Many analysts say focusing on consumer spending and corporate investment is key to understanding where the economy is heading next.
This post is being asked for comment from the White House.
