# Trump’s 25% Iran Tariffs Explained | Prof G Markets

Source: https://www.youtube.com/watch?v=qmJ-CTeQQt4
Recap page: https://rapidrecap.app/video/qmJ-CTeQQt4
Generated: 2026-01-14T12:33:21.915+00:00

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## Quick Overview

The discussion between Ed Elson and Mark Zandi concludes that the recent CPI data showing inflation remaining sticky at a 2.7% annual rate (unchanged from November) is flawed because the Bureau of Labor Statistics (BLS) did not conduct a survey in October 2022 due to the government shutdown, creating a downward bias in the data and making the reported numbers misleading, suggesting that actual inflation might be higher than indicated.

**Key Points:**
- The December CPI report showed a 2.7% annual inflation rate, matching November's rate, indicating inflation remains 'sticky'.
- Mark Zandi argues the December CPI report is flawed because the BLS did not conduct a survey in October 2022 due to the government shutdown.
- This lack of October data creates a downward bias in the year-over-year calculation, suggesting actual inflation might be higher than reported.
- The Federal Reserve's independence is questioned, as political factors (like the government shutdown) appear to influence data collection and subsequent policy decisions.
- The interviewer mentions President Trump's threatened 25% tariff on any country doing business with Iran, which could potentially cause military escalation and further economic instability.
- Core inflation (excluding food and energy) was 2.9% year-over-year, slightly below estimates.
- The expert suggests that if the Fed loses independence, it may continue policies based on politics rather than economic necessity.

![Screenshot at 15:01: The host presents a text overlay from CBS News stating, 'CPI Rose at 2.7% Annual Rate in December as Inflation Remains Sticky,' setting up the discussion about the reliability of this data point.](https://ss.rapidrecap.app/screens/qmJ-CTeQQt4/00-15-01.jpg)

**Context:** This video features an interview between host Ed Elson and guest Mark Zandi, Chief Economist at Moody's Analytics and former Chief Economist for the International Monetary Fund (IMF), discussing recent US inflation data (CPI report) and its potential political implications, especially concerning past events like the government shutdown and potential future geopolitical actions like proposed tariffs on Iran.

## Detailed Analysis

The discussion centers on the January 13, 2026, CPI report showing inflation at a sticky 2.7% annual rate, which was unchanged from November and in line with forecasts. However, Mark Zandi argues this report is flawed because the Bureau of Labor Statistics (BLS) did not conduct its survey in October 2022 due to the government shutdown. This missing data point introduces a downward bias into the year-over-year calculation, meaning the true inflation rate is likely higher than reported. Zandi notes that core inflation (excluding volatile food and energy prices) was 2.9% month-over-month, which is also high. The expert implies that the inflation situation is more severe than the headline numbers suggest, citing the precedent of the 1970s hyperinflationary period. Furthermore, the discussion touches on geopolitical tensions, specifically President Trump's threat to impose a 25% tariff on any country trading with Iran, which could provoke regional conflict and military escalation. Zandi also expresses concern about the Fed's perceived loss of independence, suggesting that political maneuvering (like the government shutdown affecting data collection) might lead policymakers to set rates based on political expediency rather than sound economic principles, potentially leading to unnecessary economic pain.

### Market & Economic Data

- CPI rose at a 2.7% annual rate in December, unchanged from November
- Core CPI (ex-food/energy) rose 2.9% YoY
- Gasoline prices dropped 3.5% MoM, electricity prices rose 6.7% YoY

### Geopolitical Discussion

- President Trump announced a potential 25% tariff on any country trading with Iran
- This move is seen as escalating tensions and potentially inviting retaliation against US interests or allies.

### Federal Reserve Independence

- Zandi suggests the Fed's independence is compromised, citing the October 2022 government shutdown that prevented BLS data collection, leading to flawed YoY inflation calculations that might mask higher actual inflation.

### Expert Analysis (Mark Zandi)

- The recent CPI data is likely flawed due to the October 2022 data gap, suggesting inflation is stickier and potentially higher than reported; the Fed's actions might be politically rather than economically motivated.

### Sponsor Segments

- The episode features ads for Framer (a no-code website builder) and LinkedIn Jobs (AI assistant for hiring).

![Screenshot at 00:26: The host presents a graphic showing major US indices \(S&P 500, Nasdaq, Dow\) and Treasury yields all trending downwards, indicating negative market sentiment.](https://ss.rapidrecap.app/screens/qmJ-CTeQQt4/00-00-26.jpg)
![Screenshot at 00:37: A graphic slide summarizing key economic movements: Treasury yields down, Oil up, and JPMorgan shares down 4% following weak earnings guidance.](https://ss.rapidrecap.app/screens/qmJ-CTeQQt4/00-00-37.jpg)
![Screenshot at 00:54: A graphic displaying a purported social media post from Donald J. Trump threatening a 25% tariff on any country doing business with Iran, dated Jan 12, 2026.](https://ss.rapidrecap.app/screens/qmJ-CTeQQt4/00-00-54.jpg)
![Screenshot at 01:38: The interview segment begins, introducing Mark Zandi, Senior Fellow at the Peterson Institute for International Economics and former IMF Chief Economist.](https://ss.rapidrecap.app/screens/qmJ-CTeQQt4/00-01-38.jpg)
![Screenshot at 15:01: A text overlay displays the headline: 'CPI Rose at 2.7% Annual Rate in December as Inflation Remains Sticky,' sourced from CBS News.](https://ss.rapidrecap.app/screens/qmJ-CTeQQt4/00-15-01.jpg)