#604: The biggest trade shake-up in 135 years is happening right now.

April brought tariff levels that economists say haven't been seen since the 1890s, creating ripple effects throughout the economy.

We're seeing a stark disconnect between official economic data and how people feel about their financial future.

While the economy added 177,000 jobs in April — beating forecasts — consumer confidence has plummeted to alarming levels.

Almost 70 percent of Americans now expect higher unemployment ahead, despite the strong job numbers.

The tariffs have triggered some unexpected behaviors. Companies rushed to import goods before prices increased, which ironically pushed the trade deficit to record levels.

Consumers went on buying sprees for cars, computers, and other expensive items, fearing they'd soon cost much more.

Meanwhile, inflation expectations have surged to their highest levels in decades.

What does this mean for investors? Bond markets reacted dramatically, with Treasury yields posting one of the sharpest spikes on record mid-April before settling back down.

The dollar weakened significantly, and economists have raised recession probability to 45 percent — up from 30 percent just last month.

Small businesses are feeling the uncertainty too.

After initial optimism about potential tax cuts and deregulation, their expectations have soured amid concerns about how tariffs might hurt smaller firms disproportionately.

Market volatility has hit retirement savers particularly hard. We take a call from a listener named Johanna who shared that she lost 30 percent of her portfolio due to recent tariff-related swings.

She’s wondering whether she’s still "Coast FIRE" — even when market shocks alter her retirement math.

Join us as we break down April's economic data, explain what's behind the market volatility, and discuss what these historic tariffs might mean for your money in the months ahead.

Timestamps:

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(00:00) The Economic Experiment

(02:00) April 2025 Job Gains

(05:41) Interest Rate Forecast

(07:04) Benefit of Roth Conversions during market declines

(08:17) Tariffs and the Smoot-Hawley Tariff Act

(13:23) The Bond Market

(17:49) The Dollar’s Decline

(19:31) Economist's Recession Predictions

(22:20) Consumer Sentiment

(25:29) Consumer Spending Rises

(27:13) Is Johanna still FIRE after the drop?

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