A financial journalist laid out a "disaster scenario" that could be triggered by president Donald Trump's sweeping tariffs.
The president announced double-digit tariffs against nearly 100 nations, and CNN's global economic analyst Rana Foroohar warned that this week's stock market sell-off could be the beginning of a worldwide crisis.
"This is a high-stakes poker game," Foroohar said. "I'm looking for any sign that other countries are willing to do a little horse trading on tariffs, that there's a deal that the president could sort of put forward? That would just take the heat down on all of this."
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However, if the president refuses to back off or the Republican-led Congress doesn't rein him in, Foroohar fears what could come next.
"I'll give you my disaster scenario, and I'm certainly not wishing for this," said Foroohar, who is also a business columnist and an associate editor at the Financial Times. "We have a tumbling dollar, we have a tumbling market. At the same time, we could see a sharp uptick in inflation. You know, we heard a little bit earlier about how people are going out and buying cars right now because they don't know what the price is going to be in the next few days, weeks, months. That's a classic inflationary spiral. Now, that would mean that even with a weakening economy, the [Federal Reserve] might have to raise rates that would just put things into a complete tailspin."
"I think, and this gets into the political, that would make the president put a lot of pressure on Jay Powell, the Fed chair," she added. "Would he end up trying to fire him if that happened, and you saw a sense that the entire central banking system was being compromised? Woo – buckle in, because that's that's what when investors see this is the U.S. acting like an emerging market and the world is in a complete, full-blown economic crisis."
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