Hedge fund guru who predicted 1987’s Black Friday crash has dire warning even if Trump halves China tariffs
Billionaire hedge fund manager Paul Tudor Jones has warned that U.S. stocks could still plunge to new lows — even if President Donald Trump backs off his aggressive tariffs on China.
‘For me, it’s pretty clear,’ Jones said on CNBC’s Squawk Box. ‘Trump’s locked in on tariffs. The Fed’s locked in on not cutting rates. That’s not good for the stock market.’
The warning from the Tudor Investment founder comes after last month’s shock rollout of the steepest import tariffs in decades, which sent global markets into turmoil.
While the S&P 500 has bounced back slightly and now sits about 8 percent below its all-time high, Jones said the market hasn’t found a bottom yet.
Trump slapped tariffs as high as 145 percent on Chinese goods, triggering retaliatory duties of up to 125 percent from China.
And though Beijing has signaled a willingness to negotiate, Jones said the economic damage may already be done.
‘He’ll dial it back to 50 percent or 40 percent, whatever,’ Jones added. ‘It’d still be the largest tax hikes since the 1960s — you can take 2, 3 percent off growth.’
Paul Tudor Jones is famous for predicting the 1987 stock market crash.
Paul Tudor Jones said that the economy appears strong, but under the surface it is actually on ‘steroids’
The Federal Reserve has kept interest rates steady since December, and Chair Jerome Powell has signaled a wait-and-see approach before any changes.
‘Unless they get really dovishand really, really cut, you’re probably gonna go to new lows,’ Jones said. ‘And then when we’re new lows, the hard day will start to follow, and it’ll probably create the Fed to move, create Trump to move. And then we’ll get some kind of reality.’
Jones made his name — and a massive fortune — by correctly predicting the Black Monday crash in October 1987, earning triple-digit returns for his clients while most investors suffered huge losses.
He launched his successful hedge fund Tudor Investment Corporation in 1980.
Last year, Jones warned that a ‘debt bomb’ is on the verge of exploding in the US. Grim projections showed interest payments on the debt will eclipse defense spending soon.
