Steve Cohen says tariffs, DOGE’s cuts are negative for economy

Billionaire investor Steve Cohen doubled down on his damaging view of the U.S. economic system attributable to a backdrop of punitive tariffs, immigration crackdown and federal spending cuts spearheaded by the so-called Division of Authorities Effectivity.

The chairman and CEO of hedge fund Point72 stated he turned bearish for the primary time shortly after President Donald Trump’s aggressive commerce coverage made him fear about inflationary pressures and decrease client spending. In the meantime, his robust stance on immigration may imply a constrained provide of labor, he stated.

“Tariffs can’t be optimistic, okay? I imply, it is a tax,” Cohen stated Friday on the FII Precedence Summit in Miami Seaside, Florida. “On prime of that, we’ve got slowing immigration, which implies the labor drive won’t develop as quickly as … the final 5 years and so.”

The distinguished hedge fund investor took a stab at DOGE’s cost-cutting strikes led by Elon Musk, saying they may solely damage the economic system extra. Musk has stated his objective is to cut federal spending by $2 trillion.

“When that cash has been coursing by way of the economic system over a few years, and now, probably it will likely be diminished or stopped in some ways, has obtained to be damaging for the economic system,” Cohen stated.

Cohen believes a pullback within the inventory market might be seemingly given the unsure macroeconomic setting. He sees the U.S. economic system’s progress slowing right down to 1.5% from 2.5% within the second half of the yr. 

“I believe we’re seeing the regime shift slightly bit. It might solely final a yr or so, however it’s undoubtedly a interval the place I believe the very best beneficial properties have been had and would not shock me to see a major correction,” Cohen stated. “I do not assume it is going to be a catastrophe.”