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 on account 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 robust stance on immigration might imply a constrained provide of labor, he mentioned.

“Tariffs can’t be optimistic, okay? I imply, it is a tax,” Cohen mentioned Friday on the FII Precedence Summit in Miami Seashore, Florida. “On high of that, we have now slowing immigration, which suggests 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 mentioned his objective is to lower federal spending by $2 trillion.

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

Cohen believes a pullback within the inventory market could possibly be doubtless given the unsure macroeconomic surroundings. He sees the U.S. economic system’s development slowing right down to 1.5% from 2.5% within the second half of the 12 months. 

“I believe we’re seeing the regime shift a bit bit. It might solely final a 12 months or so, but it surely’s undoubtedly a interval the place I believe one of the best positive factors have been had and would not shock me to see a big correction,” Cohen mentioned. “I do not suppose it is going to be a catastrophe.”