Hedge fund tycoon Cohen: Trump's tariffs, crackdown on immigration, and DOGE spending cuts will damage the US economy, and US stocks may fall.

Media reports that billionaire investor Steve Cohen expressed a negative view on the U.S. economy on Friday and increased his bearish bets. He believes that punitive tariffs, immigration enforcement, and federal spending cuts led by the so-called "Department of Government Efficiency (DOGE)" will have adverse effects on the U.S. economy. He predicts that economic growth in the second half of this year will slow from 2.5% to 1.5%, and U.S. stocks will also experience a pullback. Cohen, who heads the hedge fund Point72, stated that this is the first time he has taken a bearish stance since President Trump implemented aggressive trade policies, as this could exacerbate inflation pressures and reduce consumer spending. Additionally, Trump's tough stance on immigration could limit labor supply and affect economic growth. Speaking at the FII Priority Summit in Miami Beach, Florida, Cohen said: "Tariffs can never be positive, right? It is a tax. It can be imagined that if the U.S. imposes tariffs on a country, that country may likely retaliate with counter-tariffs. Furthermore, we are seeing immigration slowing down, which means that labor growth will not be as rapid as it has been in the past five years." The White House has consistently used tariffs as a means to reduce trade deficits and strengthen negotiating leverage with other countries. Meanwhile, the pace of expansion in U.S. business activity this month fell to its lowest level since September 2023, mainly due to a slowdown in the service sector. Cohen also criticized cost-cutting measures under Musk's leadership, believing that these actions will only further harm the economy. Musk has stated that his goal is to cut $2 trillion in federal spending. "When this funding has flowed through the entire economy for years, and now it may be reduced or stopped in various ways, it is undoubtedly negative for the economy." Cohen believes that given the current macroeconomic uncertainties, the stock market may experience a pullback. He predicts that economic growth in the second half of this year will slow from 2.5% to 1.5%. "I think the current market situation is undergoing some changes. This situation may only last for about a year, but obviously, we have passed the peak profit stage, so a significant market adjustment would not surprise me. However, I do not believe it will be catastrophic." This article is adapted from "Wall Street View," written by Zhao Yuhe, GMTEight edited by Li Cheng.