The following is a transcript of an interview with CBS News business analyst Jill Schlesinger on “Face the Nation with Margaret Brennan,” airing December 1, 2024.
MAJOR GARRETT: Welcome back to Face The Nation. We’re now joined by CBS News business analyst Jill Schlesinger. She’s in Southampton, New York this morning. Jill, Senator Ted Cruz, described tariffs and the threat of them as leverage, but what I’m economically curious about is: do retailers see this as any leverage? Do consumers only see it as leverage? Do they start to change their behavior in anticipation?
JILL SCHLESINGER: Well, let’s just talk about whether or not they’re going to change their behavior. We know there were a number of retailers that were hanging around this around this holiday weekend and saying, Oh, buy now because tariffs could drive prices up. I don’t know what most people’s motivation is when they shop, but I’m not sure it’s the rates. What we do know about tariffs is that they are a fee imposed on imported goods. The importing company, the American company that takes in that good thing, has to make a decision at that point, and that company has to decide: are we going to eat it and maybe make less money this year, or are we going to let it pass? to the consumer? So consumers are a little bit nervous about this, and companies are too, because they’re not really sure if they can pass that on and get consumers to pay that extra price. What we know is that over the long term, historically, tariffs tend to increase the price of certain goods. It’s not necessarily across the board, but you know, it’s hard to imagine, based on what we’ve seen over the last few years with this spike in inflation, that consumers are just going to accept this. It is very difficult to imagine that any company or consumer will feel like absorbing higher prices at this point.
MAJOR GARRETT: Jill, there was a tariff story during the first Trump administration. Do you foresee a possible deeper and different tariff story in Trump 2.0?
JILL SCHLESINGER: Well, I think there are two parts to that question, which is we don’t know what these rates are. And as Senator Cruz said, this is a negotiation, so we don’t know where we’re going to end up in those negotiations. But a big difference between where we are now and where we were in 2017 and 2018 is that we had incredibly low inflation during the early Trump administration. That was after the financial crisis. All those years, inflation and prices only grew at less than 2% per year. Compare that to where we are now. We had an inflation peak of 9% in the summer of 2022, a 40-year high. Yes, that inflation rate has come down, but prices are still about 22, 23% higher than they were just four or five years ago. So the big difference between the first Trump administration and the second Trump administration is that prices are already high and there are a lot of Americans who are struggling. So I think this is the real fear among the economists I talk to. They worry that this will cause real anxiety among consumers, and that consumers may pull back at a time when the economy is doing quite well.
MAJOR GARRETT: Speaking of the good economics, you analyze a lot of numbers for us, Jill, and always break them down so easily for our audience. When you look at the data, what’s the best news you see and what’s the most concerning? sign?
JILL SCHLESINGER: Well, the best news is that the job market has actually grown substantially and kept pace. So I think the labor market has been the engine of this economy, and it’s been pretty consistent. The other part of the good news story is that the United States economy, more than any other developed country, has emerged from the COVID era, and the post-COVID inflation spike is much stronger, in a growth mode. So we’re really seeing good things in the labor market. We see things in the economy. We see that AI and technology are really booming. These are all wonderful things. So what’s the downside here? I hate to be a killjoy, but why not? I’m playing one on Sunday morning, and what I can see is that these tariffs could cause a problem for a lot of consumers who are already struggling, and also the idea that we’re going to see the extension of the tax cuts from the first Trump campaign. In the individual tax code, there is concern among some investors that even though we may not have a debt and deficit crisis right now, extending those tax cuts could really upset the financial markets. That hasn’t happened yet, but those are the two worrying things: the rates, the debt and the deficit. I think those are the two looming things and of course all the things that we can’t think about right now.
MAJOR GARRETT: The three stock indexes have risen fairly steadily since Election Day. Is that a methodical and well-thought-out response to elections or a kind of exuberance that may soon run its course?
JILL SCHLESINGER: Time will tell. I think the initial reaction from investors was that a second Trump presidency would mean a reduction in tax rates or an extension of tax cuts, and those tax rates would basically remain in place for another four years. So we would have low taxes, which is especially good for the richer people. They like low taxes, and corporate tax was already written into the code. Okay, so taxes stay low. That’s a big factor when you come in, when it comes to investing. The second part is the idea that a Trump administration would have a light regulatory touch, so when you saw those first few trading days – those first few trading days after the election, what went up a lot? The most highly regulated industries. So that could be energy, that could be banking, that could be other areas that you could really need: industrial businesses, where you need a lot of regulatory interest in the operation of your business. Lighter regulation will mean these companies will do well. Okay, is it exuberance or not? Who knows? All I can tell you is that as someone who watches markets all the time, when everyone tells me the sky is clear and the sun is shining and it’s rainbows and unicorns, all I can remember is what my dad used to say : Well, no one ever rings a bell about the top or bottom. So if you’re an individual investor, don’t count on everything being great. There will be a market shift. There will be a sell-off at some point. Don’t count on everything being great all the time. Stick to your game plan and only change that game plan, not when the administration changes, but when your own life changes. That’s it.
MAJOR GARRETT: I’m laying it out for us, as always, and beautifully. Jill Schlesinger, thank you very much. And we’ll be right back.
