Recent surveys show that voters are worried with the administration’s commercial agenda, that Wall Street investors and analysts see how more and more likely to throw the defective but resistant economy that Trump inherited in a recession.
The three main rates of US shares. UU. They fell on Friday after the new economic data. The markets have judged for weeks for the accumulation of policy and statements movements by the White House officials, some of them contradict each other over how much, if anyone, pain consumers should expect from administration changes.
Consumers have expressed concern. But the risk is that this goes beyond attitudes and infects behavior.
Mark Hamrick, Bankrate Senior Economic Analyst
After winning $ 3 billion in the weeks after Trump won the elections, the wide base S&P index has fallen to the ground. Not only has these profits been deleted since it reached its maximum point on February 19, but has lost more than 3.5% since the day of the elections, sending tremors through the retirement accounts of headlines 401 (K) and forcing some financial advisors to play therapist to creepy clients.
Consumer spending, which promotes two thirds of the United States economy, has slowed but barely collapsed in the first months of this year. Retail sales increased a modest 0.2% in February, even when households prioritize the needs on non -essential purchases. The new vehicle sales increased by 1% in the first quarter, according to Edmunds, although industry analysts now fear a reversal since car manufacturers and concessionaires increase prices to compensate for tariff costs.
Meanwhile, many brands depend more on rich customers to support sales, and executives in all industries foresee a slower growth in next year.
That could lead to the Federal Reserve to delay the reduction of loan costs. It is likely that those in charge of formulating policies that weigh the latest data decide that “any conversation about [interest] Rate cuts must go back to the second half of the year, ”Joe Brusuelas, chief economist of the RSM accounting firm wrote on Friday.
For consumers, that means that credit card rates to the north of 20% are ready to stay. While 30 -year -old popular fixed mortgage rates have decreased to 6.71%fixed, political uncertainty threatens recent improvements in a real estate market that remains widely unaffordable. And while the yields of the 10 -year Treasury bonds have cooled lately, analysts consider more as a reflection of a growing concern for the direction of the economy.
“With all this change, a dense fog has fallen,” said the president of the Richmond Federal Reserve Bank on Thursday, Tom Barkin, in public comments on Thursday. “It is not a type of daily fog, ‘forecast is difficult’. It is a ‘zero visibility, stop and turn on the type of fog of its risks.”
Corporate restlessness
Meanwhile, tariff anxieties are bouncing through together the rooms just when executives prepare a new batch of profits to start releasing around mid -April.
Almost 900 non -financial companies mentioned tariffs in recent profit calls, found the global S&P market intelligence last week. But many companies still have to take into account these impacts on their forecasts, a containment pattern that “reflects the enormous level of uncertainty about when rates could promulus, for how long, at what speed, what exceptions could be applied and what could mean the reprisal measures,” analysts said.
The gross domestic product expanded by 2.4% at the end of 2024, a little more than expected, government economists said Thursday, with a relatively strong consumption expense that compensates for a drop in investment. But productivity is expected to decrease more and more.
The Atlanta Federal Reserve Bank now predicts a contraction in the first quarter, saying that it is likely that many companies generate orders before the tariffs take over and then tighten their bags of bags. JPMorgan and KPMG prevail the GDP expanding in just 1% in the first quarter, and Goldman Sachs reduced their 1% perspective before 0.6% after Friday data. JPMorgan has not ruled out a “closer 0%” rate.
Campaign promises
The current situation contrasts with the economic rebirth that Trump campaigned at the launch since his first day in office.
He promised the stump to begin to reduce the prices “immediately”, but the consumer price index has been stubbornly between 2.4% and 3.7% since June 2023. On Friday, the FED preferred inflation meter arrived hotter than expected, 2.8% to February.
Other economic milestones also look very far.
We will have a market like the one that nobody has seen before.
President Donald Trump
Trump promised to reduce energy costs within a year, but oil and gas producers are now worried that instability can reduce prices and bring them to the production of accelerations to protect their margins. While the industry channeled dozens of millions of dollars in Trump’s re -election, the perforators criticized him in an anonymous survey published Wednesday. An unidentified executive called the mantra “Drill, Baby, Drill” of Trump “no less than a myth and a cry of populist meeting” and said that “the chaos of his administration is a disaster for basic products markets.”
The prices of gasoline, while almost 40 cents ago than a year ago, they have begun their seasonal ascent.
Trump also promised to “take” the jobs and factories of other countries and create “thousands and thousands of companies and billions of dollars in wealth”, but the manufacturing production contracted last month while the employment levels in that and other sectors remain planes.
The administration is just over two months in a four -year career, and even an explosive policy change can take time to destroy the economy. Many republican priorities, including sweeping cuts and safety network programs, remain in discussion in Washington. And several of the president’s rapid and government reduction efforts have been stagnant or blocked by the courts, drawing Trump attacks and his allies frustrated with judicial controls on his actions.
“Americans continue to feel the persistent effects of four years of economic disaster under Joe Biden,” said a White House spokesman in a statement on Friday. “The Trump administration focuses on trimming the fugitive spending of Biden that fed inflation in the first place, and the decrease in energy prices demonstrates how President Trump’s first agenda in the United States is already delivering a very necessary relief for everyday Americans.”
When announcing his car rates on Wednesday, the president promised that more growth was just around the corner. Forecast of $ 600 billion to $ 1 billion in tariff revenue “within a year” and said: “We will have a market like the one that nobody has seen before.”
“You’re going to see things that will be really incredible,” Trump said. “And I think you already have.”
