Stock investors overlook persistent drag from tariffs, ey-parthenon says


Play all audios:

The U.S. is transitioning into a new and "ill-defined" status quo marked by elevated tariffs that will continue to hold back the economy, according to Gregory Daco of EY-Parthenon.


In an email on Tuesday, Daco, EY-Parthenon's chief economist, said: "While the average U.S. tariff rate has declined from 25% to 14% due to this temporary reprieve, it remains the


highest since 1939, underscoring the enduring nature of this supply-side shock." Referring to the recent rise in U.S. stocks seen through Monday's session, Daco added that


investors "have reacted with unwarranted optimism, overlooking the persistent economic drag posed by elevated tariffs ... We continue to anticipate that growth will approach stall speed


by Q4 2025, with year-over-year real GDP growth at just 0.6%."