361Firm Update on Riyadh Summit & Briefing on "Trade Reboot Tests Economy" (April 22, 2025)

This 361Firm Meetup and Briefing discussed the economic impact of the Trump administration's trade policies. Stephen Burke highlighted the IMF's revised global growth projections, down to 2.8% for 2025 and 3% for 2026, citing trade policy uncertainty as a major factor. Scott Slayton noted a 10.5% decline in the US dollar since January 2020, attributing it to trade tensions and a weaker dollar policy. The discussion also covered the potential for a recession in 2025, the impact of tariffs on exports and imports, and the long-term implications for the US dollar's reserve currency status. The meeting discussed the economic challenges faced by Russia, including high inflation and fiscal problems due to defense spending. The Chilean economy's past success was attributed to factors other than Milton Friedman's advice. The U.S. dollar's recent volatility was compared to past periods, with concerns about its future as a reserve currency. Upcoming bond auctions and their potential impact were highlighted, along with the unpredictability of tariff policies. The discussion also touched on the potential long-term effects of tariffs on manufacturing and the need for strategic investments to maintain U.S. competitiveness. Outline Meetup - Introductions and New Members, Saudi Event Logistics Briefing Starts with Discussion on Trade Policy and Economic Impact (see summary above) Stephen Burke discusses the IMF's revised growth projections, highlighting the impact of trade policy uncertainty on global growth. Scott Slayton's Analysis on the US Dollar Scott Slayton presents his report on the US dollar, highlighting the significant decline in the dollar since the Trump administration took office, the impact of high tariffs on growth, competitiveness, and the US dollar's role as a reserve currency, potential for a weaker dollar to support exports and the impact on American exceptionalism, need for investors to diversify into foreign stocks, bonds, and real assets. Q&A and Further Discussion Roger Arjoon questions the rationality of Trump's trade policies and the potential for a recession. Stephen Burke and Scott Slayton discuss the potential outcomes of the trade negotiations and the impact on the US dollar. Economic Situation in Russia and Chile Simon Vine discusses the economic crisis in Russia, highlighting the depletion of their reserve fund and the high inflation due to defense spending. He compares the current situation in Russia to the Chilean economy, noting that Chile's economic success was not due to Milton Friedman's advice but to other factors. Vine mentions that the dollar's value has fluctuated significantly in the past, citing 1994 He expresses uncertainty about the future but hopes that the current drastic measures will be successful. Bond Vigilante Front and Dollar Weakness Leslie Bendig asks about the potential for another bond auction issue and the impact of a weak US dollar on Asia in 2026. Stephen Burke explains that the bond auctions could be influenced by various factors, including Fed meetings and trade discussions. Burke discusses the mixed impact of a weaker dollar on Asia, considering both the benefits and the potential for higher inflation and slower growth. Impact of Tariffs on Consumer Behavior Michael Hammer shares a personal anecdote about the rising cost of sneakers at Walmart, attributing the increase to tariffs. Stephen Burke acknowledges the potential for significant market distortions and volatility due to unusual policies. Long-Term Investment Needs and Competitive Advantage Sameer Sirdeshpande emphasizes the need for long-term investments in manufacturing, distribution, and innovation to remain competitive. Mark Sanor mentions that the upcoming San Francisco event will address these issues, highlighting the importance of strategic investments. Legal and Political Uncertainties Parth Vakil questions the impact of successful trade renegotiations on the dollar's reserve currency status. Stephen Burke believes that the US's scale and depth make it difficult for any alternative currency to replace the dollar. Volatility and Investment Opportunities Michael Hammer and Stephen Burke discuss the volatility in the market and its impact on investors. Hammer argues that the overall trend will continue to be downward, while Burke sees opportunities for investors to upgrade their portfolios.