Steve Cohen says tariffs, DOGE’s cuts are damaging for economic system

Billionaire investor Steve Cohen doubled down on his damaging view of the U.S. economic system as a result of 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 mentioned he turned bearish for the primary time shortly after President Donald Trump’s aggressive commerce coverage made him fear about inflationary pressures and decrease shopper spending. In the meantime, his powerful stance on immigration might imply a constrained provide of labor, he mentioned.

“Tariffs can’t be constructive, okay? I imply, it is a tax,” Cohen mentioned Friday on the FII Precedence Summit in Miami Seaside, Florida. “On prime of that, we’ve got slowing immigration, which suggests the labor pressure 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 harm the economic system extra. Musk has mentioned his purpose is to reduce federal spending by $2 trillion.

“When that cash has been coursing via the economic system over a few years, and now, probably it will likely be lowered or stopped in some ways, has acquired to be damaging for the economic system,” Cohen mentioned.

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

“I believe we’re seeing the regime shift a bit bit. It could solely final a yr or so, but it surely’s undoubtedly a interval the place I believe the perfect good points have been had and would not shock me to see a major correction,” Cohen mentioned. “I do not assume it may be a catastrophe.”