All this comes just days before what President Donald Trump has repeatedly declared will be “Liberation Day,” April 2, when he says he will announce major increases to his existing tariffs campaign.
The Washington Post’s chief economics reporter, Jeff Stein:
Barely more than two months into Trump’s second term, economic experts are issuing warnings.
“This is one of the scariest charts I’ve seen in awhile,” declared The Washington Post’s economic columnist Heather Long, pointing to a chart showing the “Expected Change in Financial Situation in a Year.”
“When Americans are asked — Do you think your financial situation will be better off in a year? They increasingly say ‘no,'” Long explained.
“In the ‘vibe-cession’ under Biden, people gave the economy poor grades. But they were generally optimistic about their personal finances (esp the rich),” Long noted. “Under Trump 2025, people at all income levels are worried they will be worse off in a year. This is the type of situation that causes people to really pull back on spending. This is what is different than 2023 or 2024.”
Pointing to another chart, Long writes, “Wow. Huge drop in consumer sentiment among all income groups.”
“Even the rich are worried now.”
Consumer sentiment “is down more than 30% since November,” she says.
“People are worried they will lose their jobs. Two-thirds of consumers expect unemployment to rise in year ahead–> highest concern since 2009,” she noted, adding, “People are fearful tariffs will drive up prices.”
“Even high-income consumers are concerned about their personal finances; only 26% of higher-income consumers expect to be better off financially in a year, down from 42% in August 2024.”
It gets worse.
“Inflation expectations are surging due to Trump’s tariffs,” she writes. “I continue to think the Trump team is really misreading how different 2025 is compared to 2017/2018. People are watching prices closely now.”
Princeton University economics professor Alan Blinder, considered to be among the most influential economists in the world, blasted the President this week in a Wall Street Journal op-ed: “Trump Plays Recession Roulette With the American Economy.”
“I thought the probability of a downturn was nearly zero. Now one is likely, and we may see stagflation,” he wrote. “Trump’s actions seem designed to drive the U.S. economy into the ground. This would truly be a Trumpcession.”
For those unfamiliar with those terms, keep reading.
“Start with high tariffs. The president’s press secretary may think tariffs are tax cuts. In fact they are tax increases—probably big ones. And any tax increase saps the purchasing power of consumers. Take away enough and you’re flirting with a consumer-driven recession—or stagflation, since tariffs also drive up prices. The stock market understands the peril and is dancing to tariff news.”
Blinder warns that measures of uncertainty “have all leapt skyward recently.”
“What about immigration, both legal and illegal, and its effects on the availability of labor? What about the impending battle over extending—or even expanding—the 2017 tax cuts? What will be left of health and safety regulation when Elon’s musketeers are finished with it? How many Americans feel comfortable about their tax and Social Security records sitting in Mr. Musk’s computers?”
Long also points to stagflation.
“Bank of America economists now believe that ‘modest stagflation’ is the most likely outcome for the US this year, and that the combination of low growth and elevated prices will likely keep future Fed rate cuts on hold,” she writes.
For those who want to dive into some numbers, this one isn’t too hard to understand. The Federal Reserve Bank of Atlanta, known as the Atlanta Fed, now shows that U.S. gross domestic product, or GDP —the value of all goods and services produced in the country—is now expected to drop by nearly three percent.
Even Fox News is warning on inflation, saying, “too many goods are rising at too fast of a price.”
Watch the video below or at this link.
