Tractor-trailers wait in line for inspection before crossing the Bridge of the Americas International Bridge port of entry on the U.S.–Mexico border in Juarez, Chihuahua state, Mexico, on April 2, 2025. Photographer: Justin Hamel/Bloomberg.
The United States risks being caught between slowing growth and rising prices as a result of the sweeping tariff plans unveiled Wednesday by the Trump administration, according to the president of Apollo Global Management Inc.
The chances of a recession in the world’s biggest economy have risen to 50 percent or higher, Jim Zelter said in a Bloomberg Television interview in New York today. The risk that tariffs accelerate inflation and constrain the Federal Reserve’s ability to stimulate growth by slashing rates has also risen materially, he said. “If I was here six months ago, I would have said a recession in 2025 or 2026 was one-in-five, and now that’s certainly one-in-two, if not higher,” Zelter said.
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The tariff plans announced by President Donald Trump have prompted a sharp sell-off in equity markets around the world, as the extent of the proposed levies surpassed expectations. They’ve also caused a drop in Treasury yields as traders weigh the prospect of more rate cuts if growth wanes. But the Fed will also be mindful of rising inflation, Zelter said.
“The other scenario is a stagflation scenario; that went from a one-in-six or one-in-seven to a one-in-five or one-in-four, and that’s got to be the concern of policymakers within the U.S. and around the globe,” he said. “When you look at the balance of the dual mandate right now, it is certainly much more challenging. I think the Fed is going to have to practice much more patience from here.”
The measures, which will come into force this month and could still be subject to negotiation, are designed to force companies to bring manufacturing back to the United States. That potential nearshoring presents an opportunity for private markets as companies seek financing to move manufacturing capacity, Zelter said.
Apollo is in the process of building a marketplace to trade high-grade private assets to shore up liquidity for its strategies and earn fees for trades. The firm has so far traded more than $2 billion of assets, including over $100 million in March alone. Apollo often allocates investment-grade loans it makes to its insurance business Athene and third-party insurers. “We are going to see this as a turning point, with private markets playing a larger role for these corporates,” he said. “Who is going to finance this re-shoring—that’s part of the master plan.”
Zelter was made president of Apollo earlier this year in a newly created role, making him the company’s second-in-command to CEO Marc Rowan.
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