President Trump’s Economy: Boom, Bust, or Business as Usual?
Speakers
Summary
- Macro Environment (2026): The U.S. economy has stabilized with steady growth continuing from 2024 through 2025. Unemployment is stable, and productivity is showing early signs of picking up due to AI adoption.
- The Tariff Conflict: A major constitutional clash exists between President Trump and the Supreme Court regarding tariffs. Despite the Court striking down previous tariffs, Trump is proceeding with new "reciprocal tariffs" via executive order.
- Inflationary Pressure: Tariffs have subtracted slightly from growth but added a "meaningful amount" to inflation, specifically visible in consumer goods like furniture and electronics.
- The $100B Refund Trade: The Supreme Court ruling implies that $88-$100 billion in previously collected tariffs must be refunded. This creates a massive potential windfall for large importers who have the administrative capacity to file for these refunds, while small businesses may struggle to access this liquidity.
Trade Ideas
Jason Furman
Former Chair of the Council of Economic Advisers
Furman explicitly states that tariffs have "added a meaningful amount to inflation," citing rising prices in furniture and consumer electronics. With the President doubling down on "reciprocal tariffs" (5-8% surcharges) despite court rulings, inflationary pressure is structural, not transitory. If the administration replaces income tax with tariffs (a "ludicrous" idea per Furman, but a signaled intent), inflation expectations will unanchor. Long inflation hedges (TIPS, Gold) to protect against policy-induced price increases. The Supreme Court successfully blocks all new tariff implementations, causing deflationary pressure as goods prices normalize.
Jennifer Hillman
Trade Expert / Legal Analyst
The Supreme Court ruled specific tariffs illegal, mandating refunds of approximately $88 to $100 billion to importers. Hillman notes, "For the big importers that have all of the paperwork readily available, they are likely to... move to process all of their refunds." This ruling effectively acts as a massive, one-time cash injection (stimulus) for major U.S. retailers who rely heavily on imports. While the administration may make the process difficult, large corporations (Walmart, Target, Best Buy) have the legal and administrative resources to navigate the bureaucracy and reclaim this capital, whereas small businesses do not. Long large-cap retailers/importers as beneficiaries of a potential multi-billion dollar capital return. The Trump administration successfully delays refunds indefinitely or creates insurmountable bureaucratic hurdles even for large firms.
Jason Furman
Former Chair of the Council of Economic Advisers
Furman states that "AI was a big factor on the demand side in the economy in 2025" and expects it to be bigger in 2026, specifically citing "money that's spent building data sensors, the energy to supply them." The economic resilience is being underpinned by AI infrastructure capex. This confirms the "picks and shovels" trade is still active in 2026. The specific mention of "energy to supply them" highlights the bottleneck shifting from chips to power generation and cooling. Long the AI infrastructure stack: Chips (NVDA), Cooling/Infrastructure (VRT), and Power Generation (Utilities). Overinvestment leads to a capex cycle bust if AI monetization slows down.
Jennifer Hillman
Trade Expert / Legal Analyst
Hillman warns that regarding tariff refunds, "It's going to be those small businesses... that have been hurting the most... They're going to have the most difficulty if this process is difficult." The legal victory against tariffs is asymmetric. Large caps get the cash (refunds); small caps get the bureaucracy and legal fees. Furthermore, Furman notes tariffs are "sticking," which disproportionately hurts smaller importers who lack pricing power to pass on inflation to consumers. Short Small Caps (IWM) relative to Large Caps, as they face higher regulatory friction and lower probability of accessing the tariff refund liquidity. Domestic-focused small caps that do not import goods could outperform if the general economy accelerates.
Up Next
This Bloomberg Markets video, published February 28, 2026, features Jason Furman, Jennifer Hillman discussing TIPS, GLD, WMT, TGT, BBY, COST, NVDA, VRT, IWM. 4 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Jason Furman, Jennifer Hillman · Tickers: TIPS, GLD, WMT, TGT, BBY, COST, NVDA, VRT, IWM