Investing.com -- US economic growth is expected to decelerate in the second half of the year, according to billionaire Steve Cohen. His prediction is based on the potential impact of tariffs, stricter immigration laws, and government cost-cutting initiatives led by Elon Musk.

Cohen, the founder of Point72 Asset Management, shared his outlook at the Future Investment Initiative Institute’s summit in Miami Beach on Friday, according to Bloomberg. He highlighted persistent inflation, slowing growth, and the potential for retaliatory tariffs as factors that could hamper the US economy.

Cohen expressed a negative outlook, a sentiment he hasn't held for some time. He suggested that the period of greatest gains may have passed and predicted the possibility of a significant market correction.

Cohen anticipates that US economic growth will slow to 1.5% from around 2.5% in the second half of the year. He expressed skepticism about the Department of Government Efficiency, led by Elon Musk, describing it as an austerity measure that could hinder economic progress.

Cohen also addressed the issue of tariffs, stating that they are essentially a tax that could potentially harm the economy. He noted the possibility of a reciprocal response if the US imposes additional taxes, with other countries potentially raising their taxes in return.

The White House has advocated the use of tariffs for various purposes, from reducing trade imbalances to increasing leverage over other countries for negotiating deals. However, US business activity has expanded at its slowest rate since September 2023 this month, largely due to a slowdown in the service sector, which is a key driver of the economy.

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