Scott Kleinman, Co-President of Apollo Global Management, has cautioned markets against complacency regarding the current trajectory of U.S. inflation and interest rates. He emphasized that inflation has not been curtailed, urging close attention to economic indicators despite Federal Reserve statements.
Following the election of President Trump, who proposed raising various import tariffs, economists have raised concerns that these tariffs could trigger inflation as the Federal Reserve begins to cut interest rates. Kleinman, however, highlighted that inflationary pressures were already mounting due to global trends like digital infrastructure development and decarbonization, regardless of Trump's policies.
Kleinman further noted that the economic landscape might require enduring a prolonged period of higher interest rates. Reduction in interest rates by the Federal Reserve could weaken its ability to control inflation effectively, adding to the complexity of managing economic stability.