Trump has rolled out a universal 10% tariff and floated up to 50% for non-compliant nations. And while the White House downplays it, Stanley Druckenmiller is not having it. I do not support tariffs exceeding 10%. Stanley Druckenmiller on X. Druckenmiller says he's still betting against US government bonds because he thinks interest rates will keep going up. He believes the Federal Reserve made a mistake by cutting rates too early, which encouraged risky behavior in the markets. He warns that the government's spending is out of control.
I still have a short in treasuries. I know a lot of people have been surprised by interest rates rising after the cut. Of course, we weren't because I thought the Fed was making a mistake and I was worried about the same animal spirits we've been talking about and of course our horrendous fiscal situation. Having said that, we've come quite a ways. I think we're probably in the seventh inning, but sometimes you can make a lot of money from the seventh inning to the ninth inning. And who knows if the Fed stimulus into a meltup in asset prices with the kind of animal spirits I talked about give you upward inflation, which is not our forecast, but we're definitely open-minded to it and we're not expecting lower inflation that could tip the bond market and create a problem. So, we're still short treasuries. But we're certainly not pressing the size of that position.
Now, when he says we're in the seventh inning, he means we're late in the game. There's still time to fix things, but danger is building fast and we're running out of time.
Yeah, I don't want to exit this interview as tariff man. In a perfect world, I would not be for a 10% tariff, but we're not in a perfect world. As you know, we have a big fiscal problem. Mandatory spending plus interest expense is literally 100% of revenues right now and both sides of the aisle have said they are not about to cut entitlements which is the elephant in the room. Having said that, because of that we need pay force. So our main choices are an income tax and a consumption tax like tariff. So when I say tariffs are the lesser of the two evils in terms of those two because we have a fiscal problem, we need revenues. Tariffs will generate revenues. We also have a private savings problem in this country. They're far too low. So I think a lot of economists who are out raising the alarm bells about tariffs would probably be fine with a consumption tax. To me, tariffs are simply a consumption tax that foreigners pay for some of it. Now, the risk is retaliation, but as long as we stay in the 10% range, and I think so-called fear of Donald Trump, I think the risks are overblown relative to the rewards. The rewards aren't high, it's more like they're the lesser of two evils.
What he really means is the US is so deep in fiscal trouble that even bad ideas start to look acceptable. With both parties refusing to touch entitlements and interest costs eating 100% of revenue, he's basically saying we're screwed. Tariffs aren't smart policy. They're a desperate move when the political system is too broken to make real adult decisions.
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Druckenmiller, S. (2025, April 15). Stanley Druckenmiller - A Bigger Crash is Coming [Interview transcript]. FundJab. CEOInterviews.AI. https://ceointerviews.ai/interview/710598/
MLA
Stanley Druckenmiller. "Stanley Druckenmiller - A Bigger Crash is Coming." FundJab, 15 Apr. 2025. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/710598/.
BibTeX
@misc{druckenmiller2025_710598,
author = {Stanley Druckenmiller},
title = {Stanley Druckenmiller - A Bigger Crash is Coming},
howpublished = {Interview transcript, FundJab. CEOInterviews.AI},
year = {2025},
month = {apr},
url = {https://ceointerviews.ai/interview/710598/},
note = {Speaker-attributed transcript with timestamps}
}
