Fisher Investments Chairman Weighs in on Tariff Impacts and the Future of Cash

2025-12-25 economy

Camas, Thursday, 25 December 2025.
Ken Fisher identifies the phasing out of pennies as a natural technological evolution toward a cashless society. Addressing economic concerns, he clarifies that while tariff litigation may spur volatility, stocks remain the most reliable inflation hedge, cautioning investors against mistaking standard market corrections for true bear markets.

Analyzing the Tariff Impact on GDP

While the Supreme Court’s tariff case may generate short-term market volatility, the broader economic data reveals a complex adaptation to trade barriers [1]. In the third quarter of 2025, US real GDP growth accelerated to an annualized 4.3%, significantly influenced by international trade dynamics [2]. Net trade contributed 1.6 percentage points to this growth, a figure bolstered by a decline in imports rather than a surge in outbound goods [3]. This contraction in imports serves as a correction to the first quarter of 2025, when imports soared by 38% annualized as businesses aggressively front-ran tariff implementation to sidestep impending taxes [3].

Distinguishing Volatility from Value

Fisher emphasizes that understanding these fluctuations requires a clear definition of market terms to avoid panic. He defines a true bear market as an extended drop exceeding 20%, whereas a decline between 10% and 20% is merely a correction [1]. This distinction is vital for investors navigating the current inflationary period. Fisher argues that stocks remain the most consistent vehicle for performance during inflation, noting that by 2024, equities had not only recovered from the 2022 decline but had surpassed it [1]. Conversely, while gold prices surged past US$4,300 per ounce in 2025 [4], Fisher cautions that the metal historically underperformed as an inflation hedge from 1980 to 2008 [1], and recent tariffs were not the primary driver of its 2025 rally [5].

Technological Evolution and Future Outlook

Beyond market metrics, structural changes in the economy are evident in the shift toward cashless transactions. Fisher views the potential end of the penny and the increasing refusal of cash by retailers not as a crisis, but as a natural evolution of technology [1]. Looking ahead to 2026, global trade is expected to face continued headwinds, with the United States, Mexico, and Canada scheduled to review their trade agreement [2]. Amidst these shifts, Fisher advises against reliance on calendar-based strategies like the “Santa Claus Rally,” arguing that such patterns fail to hold up under rigorous statistical analysis [6].

Sources

Market Strategy Fisher Investments