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And as always, great to spend some time every month with Wharton ameritus professor of finance Jeremy Seagull,
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who's also a senior economist at Wisdomree. Jeremy, obviously lots to discuss since we last talked. I guess
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let's start with the Scotas's decision on tariffs and obviously the potential
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impact that it's going to have uh on the markets, on the economy and such. Give
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us your thoughts. >> Yeah. Wow. Um, I mean, we we we knew it the the prediction market said it was
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going to be NYX, but we didn't quite know how. Um, so, uh, let let's say
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where we stand. Um, obviously what he has gone to is section 122, which he first said was going to put a 10% and
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then he he realized that the max was 15, so why not go to 15, >> right? % which then he went to on
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Saturday. Um that does lower uh um the average a couple of points from what it was under the AIPA tariffs. Um uh
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particularly from China and several other Asian countries. Of course, it raises it on several like uh the UK
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which negotiated a 10% raise. Um uh uh remember Trump likes to go in with a big stick and and then go down from there.
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>> Um so now his at least by using that his his big stick isn't quite as big.
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However, he has lots of other powers. I mean he has powers to dequery embargos on certain uh um uh goods. He has a
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number of other authorities that he can use. One of the scariest authorities you
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can use is the section 338 that goes from the smooth holoy tariff of of of um of of 1932 which of course was one of
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the most damaging tariffs we've had that allows up to 50% with no uh requirement
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of federal agency and no limit on duration. Now that would be extreme. Yeah. But he has that in a back pocket
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if he wants to use something like a hammer >> uh to do that. Um, let let's let's talk
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about what the consequences are likely to be. I I don't think the final tariffs are going to be all that much
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different from what they would negotiated. Uh, I know there's some I think the ones
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that haven't negotiated will go through. Um, he can still, as I say, say, "Hey,
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listen, I have other powers that can be much more than 15% if I want to use them." and and therefore I think he's
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going to proceed along those same lines. A um a big question mark of course is the um uh the refunds which was uh
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unfortunately not specified by the Supreme Court and by the way this decision should have come 6 months ago.
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I mean there was no there was no evidence they had to find a search for anything like that. I mean it was right
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in the text to begin with and we would have avoided a lot of hardship and and mess as uh uh Justice Kavanaaugh in fact
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used that very word. So there's a whole question of the refunds um that could be
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litigated for months if not years. Um so there's more uncertainty because we you
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know exactly what rates are going to be and how are things has been put a monkey
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wrench. However, I don't think the final outcome is going to be all that much
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different. >> And um uh I think the economy actually looks fairly good looking forward.
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>> Yeah. And and since the last time we talked to you, the Dow has crossed
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50,000. Uh the S&P I think dipped across 7,000 in an intraday and then headed
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back. uh the the markets have been fairly resilient to all of the stuff that has gone on out there whether it be
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the tariff impact or you know some of the global events that have gone on as well.
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>> Yeah. I mean the big event coming up I think is Iran obviously and how he's
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going to act on that. That's the next I think really significant thing that affects oil and a lot of others. We
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don't know what he's going to do and how he's ne negotiate that. one of the the
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speed bumps uh as we know Kevin Worsh being appointed is a favorable sign. So uh you know uh and the government
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shutdown was avoided in Maine but there's still TSA uh you know and flights uh that could be disrupted if
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this go on for several months but that is sort of in the background. The government is uh funded outside of
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Homeland Security all the way till September 30th. So that's more on the back burner. I would say the Iran thing
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is the big thing coming up. Uh I wish I could predict what's going to happen,
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but I cannot. Um I think the tariff thing is is really going to fade into something that is is not going to be
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that much different uh than um what the levels we would have seen under AIPA. >> Since you mentioned Kevin Worsh, let me
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ask you your thoughts on Mr. Worsh the next Fed chair, assuming that you know the that his nomination goes through in
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Congress. Um I like him. I liked him as among the four choices. I thought he was the best.
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So I was pleased that Kevin Worsh I mean he's a man that's been on the Fed for
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quite a number of years during the financial crisis under Bernani. Um he he's he's a smart guy. uh how he won't
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take over the meeting until the June meeting uh which is quite a bit from now when we're going to have you know
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there's so much that can happen between now and then uh we we don't know how we
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how we going to react. Uh I I will stick with my feeling that I had I think in the in the last month. I still think we
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have a ways to go down on um the uh uh Fed funds rate. I would like to see two more cuts. I'd like to see the Fed fund
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rate in the low 3s. right and going forward. Um but if whether it's done, you know, next meeting or two or three
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meetings from now is is not that significant. Well, and and interesting you mentioned that because there were
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comments by Christopher Waller uh earlier today as we taped this on a Monday. Um that uh he can see that if
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there is some some issues with the labor data the next you know couple of times we get reports uh that he could see uh
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you know the Fed going to a move to a cut. So it seems like >> Oh absolutely. I mean it is it's
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completely data dependent. But if we see some weak data now we see some weak labor market data which we have not so
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far. >> Yeah >> we have not seen weak neighbor labor market data. I mean those those jobless
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claims are remaining in there. Um you know ob we we think the equilibrium amount of monthly payroll gains is
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somewhere in the neighborhood of 40 50,000. we've been in that area, but it could deteriorate certainly uh you know
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uh and and if it does deteriorate there would be no question that there would be
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a cut. Um but I think they're holding firm if we t see the type of labor market data that we have actually seen
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over the last 3 months. >> So obviously Iran is the top thing on your on your radar right now. Anything
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else that is really drawing your attention as well? Yeah, I think I I think I think Iran is
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is is definitely the big thing. I mean, there's going to be a lot of churning
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and little bit more uncertainty as a result of of these terrorists, but I would not, you know, I I would use that
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uncertainty I think is is a buying condition. I think that I think the market is still going to go up here in
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2026 because I don't think the final outcome of the tariff, in fact, I think
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it's welcome that there was a limit put on the president. and he can't just
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throw around any rate that he wants. Again, in his back pocket, he has a few nuclear options here with this Mudhalli
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tariff and embargos that he uh could use as a big stick, but at this particular point, doesn't look like he is uh uh
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wanting to use those. >> Jeremy, always great to catch up. Thank you very much, sir.
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>> Thank you very much, Dan. >> You got it. Jeremy Seagull, who is professor emeritus of finance here at
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the Wharton School and senior economist at Wisdom Tree.