US growth is likely to slow in the second half of the year as tariffs, tighter immigration laws and government cost-cutting efforts led by Elon Musk weigh on the economy, billionaire Steve Cohen said.
The Point72 Asset Management founder, speaking at the Future Investment Initiative Institute’s summit in Miami Beach Friday, struck a bearish tone when asked about his outlook. He pointed to sticky inflation, slowing growth and the possibility of tit-for-tat tariffs as drags on the US economy.
“I’m actually pretty negative for the first time in a while,” Cohen said. “It may only last a year or so, but it’s definitely a period where I think the best gains have been had and wouldn’t surprise me to see a significant correction.”
Cohen said US economic growth is likely to slow to 1.5% from about 2.5% in the second half of the year. He was also downbeat on the Musk-led Department of Government Efficiency, calling it an austerity initiative, and said tariffs will hold the economy back.
“Tariffs cannot be positive. It’s a tax,” Cohen said. “And you can imagine tit-for-tat if the US implements a tax on somebody, they’re going to perhaps raise the stakes and raise their tax back.”
The White House has touted using tariffs for everything from reducing trade imbalances to increasing leverage over countries to hammer out deals. US business activity expanded this month at the slowest pace since September 2023, dragged down by the service sector, the main driver of the economy.
Written by: Devika Krishna Kumar @Bloomberg
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