Consumers are concerned over inflation. Recession should be the bigger fear.
Pessimism Returns
The Conference Board reports US Consumer Confidence Dropped Sharply in February
The Conference Board Consumer Confidence Index® declined by 7.0 points in February to 98.3 (1985=100). The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell 3.4 points to 136.5. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions— dropped 9.3 points to 72.9. For the first time since June 2024, the Expectations Index was below the threshold of 80 that usually signals a recession ahead. The cutoff date for preliminary results was February 19, 2025.
“In February, consumer confidence registered the largest monthly decline since August 2021,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. “This is the third consecutive month on month decline, bringing the Index to the bottom of the range that has prevailed since 2022. Of the five components of the Index, only consumers’ assessment of present business conditions improved, albeit slightly. Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a ten-month high.”
February’s fall in confidence was shared across all age groups but was deepest for consumers between 35 and 55 years old. The decline was also broad-based among income groups, with the only exceptions among households earning less than $15,000 a year and between $100,000–125,000.
Guichard added: “Average 12-month inflation expectations surged from 5.2% to 6% in February. This increase likely reflected a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs. References to inflation and prices in general continue to rank high in write-in responses, but the focus shifted towards other topics. There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019. Most notably, comments on the current Administration and its policies dominated the responses.”
Consumers’ views of their Family’s Current and Future Financial Situation were less positive, retreating from the series highs reached in January. The proportion of consumers anticipating a recession over the next 12 months increased to a nine-month high. (These measures are not included in calculating the Consumer Confidence Index®.) Consumers’ bullishness about the stock market also retreated: only 46.8% of consumers expected stock prices to increase over the year ahead—the smallest share since April 2024, and down from 54.2% in January. By contrast, 32.8% expected stock prices to decline, up from 24.8% in January. More than half (51.7%) of consumers expected higher interest rates over the next 12 months. The share of consumers expecting lower interest rates dropped further to 24.0% from 27.1% last month.
Expectations Six Months Hence
Consumers’ outlook for business conditions turned negative in February.
- 20.2% of consumers expected business conditions to improve, down from 20.8% in January.
- 26.7% expected business conditions to worsen, up from 19.6%.
Consumers’ pessimism about the labor market outlook worsened.
- 18.4% of consumers expected more jobs to be available, down from 19.1% in January.
- 25.9% anticipated fewer jobs, up from 21.0% in January.
Consumers were less optimistic about their income prospects in February.
- 18.2% of consumers expected their incomes to increase, a slight uptick from 18.1% in January.
- But 13.7% expected their incomes to decrease, up from 12.3%.
Recession Outlook
Biggest Monthly Decline Since August 2021
CNN Reports Consumer Confidence Registers Biggest Monthly Decline since August 2021 as Inflation Fears Take Hold
Economic jitters are showing up across various sentiment surveys as the Trump administration aims to reconfigure America’s trade relationship with the world and inflation shows signs of getting stuck.
The latest evidence comes from The Conference Board’s Consumer Confidence Index for February, released Tuesday morning. The index fell to 98.3, falling for the third-straight month and marking the largest monthly decline since August 2021, as expectations for inflation in the year ahead climbed. That coincides with the trends reflected in the University of Michigan’s consumer survey for February.
Homebuilders are also growing worried, according to the National Association of Home Builders; even US small businesses, which remain somewhat optimistic about deregulation and tax cuts, are in doubt about the economy’s future. The National Federation of Independent Business’ Uncertainty Index rose in January to its third-highest reading on record.
America’s souring economic mood, driven by worries over President Donald Trump’s aggressive approach to tariffs, is a stunning reversal from the (brief) burst of optimism after President Donald Trump’s election in November.
Stephanie Guichard, senior economist, global indicators, at The Conference Board, said in a release that “consumers became pessimistic about future business conditions and less optimistic about future income.”
If Trump’s policies cause inflation to pick up, “it could be appropriate to ignore or look through an increase in the price level if the impact on inflation is expected to be brief and limited,” St. Louis Fed President Alberto Musalem said at a recent event in New York. “However, a different monetary policy response could be appropriate if higher inflation is sustained, or long-term inflation expectations rise.”
“I would be especially concerned by evidence suggesting (inflation expectations) are becoming unanchored,” Musalem said.
Sentiment surveys don’t necessarily predict future spending behavior.
But today’s economic landscape is rife with uncertainty, which may be affecting people’s spending plans, according to a new Wells Fargo survey released Tuesday. About three-quarters of 3,657 adults and 203 teens surveyed across the country said they plan to reduce their spending, citing uncertainty in the economy.
“Consumer behaviors are shifting,” said Michael Liersch, head of advice and planning at Wells Fargo, in a release. “The value of the dollar and what it is providing may not be as predictable anymore, which seems to be more pronounced for younger Americans.”
The survey showed that 82% of Gen Z adults and 79% of Millennials plan to pare back their spending in the coming months. Eating out or food delivery gave respondents the most sticker shock, according to the survey, followed by a tank of gas and prices for concerts or sporting events.
Much Lighter Confidence Than Expected
CNBC reports Consumer Confidence Comes in Lighter than Expected in Latest Sign of Slowing Economy.
Consumers grew more pessimistic about the economic outlook in February as worries brewed about a slowing economy and rising inflation, the Conference Board reported Tuesday.
The board’s Consumer Confidence Index slipped to 98.3 for the month, down nearly 7% and below the Dow Jones forecast for 102.3. This was the lowest reading since June 2024 and the largest monthly drop since August 2021.
“Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income,” said Stephanie Guichard, the board’s senior economist for global indicators. “Pessimism about future employment prospects worsened and reached a ten-month high.”
Though most economic indicators reflect continued growth, the Conference Board gauge matches other recent surveys showing waning confidence. Last week, the University of Michigan reported a larger-than-expected monthly decrease of nearly 10% in February while the five-year inflation outlook among respondents hit its highest level since 1995.
Inflation Expectations Nonsense
Components of the CPI
Inflation may rise or fall, but expectations will not have anything to do with it.
Please consider How Do Inflation Expectations Impact Wages and Future Consumer Inflation?
By my calculation, at least 80 percent of the CPI is inelastic.
People will not double up on rent in advance if they think rent will go up. Similarly they will not double up on gasoline, medical operations, etc.
People can stock up on food, if they have a freezer, as I recommend. If so, they stock up on sales prices. People do not generally stock up at the highest prices expecting still higher prices. And where would they store it anyway? A freezer only holds so much.
Do people buy two cars if the price is going up? Take out extra prescriptions?
Among elastic items, do people take two vacations this year and none the next if the cost will be higher next year?
So, expectation proponents, please tell me what the hell people will stock up on at high prices simply because they expect higher prices next year. Then tell me what percent of the CPI that is.
Why Do We Think That Inflation Expectations Matter for Inflation? (And Should We?)
Please consider the Federal Reserve study Why Do We Think That Inflation Expectations Matter for Inflation? (And Should We?)
The direct evidence for an expected inflation channel was never very strong. Most empirical tests concerned themselves with the proposition that there was no permanent Phillips curve tradeoff, in the sense that the coefficients on lagged inflation in an inflation equation summed to one.
Finally, even if one is willing to entertain the idea that in some vague, mushy sense concern over costs and demand by individual firms facing fixed prices leads to a dependence of aggregate inflation on expected inflation, we are still left with the conclusion that short-run expectations should be the ones that are most important.
The Fed study was not only accurate, it was funny, replete with humorous quotes. Here are some of the quotes in the article.
Amusing Quotes
- I’m always a little dubious about an appeal to expectations as a causal factor; expectations are by definition a force that that you intuitively feel must be ever present and very important but which somehow you are never allowed to observe directly: R. M. Solow (1979)
- Pure economics has a remarkable way of pulling rabbits out of a hat—apparently a priori propositions which apparently refer to reality. It is fascinating to try to discover how the rabbits got in; for those of us who do not believe in magic must be convinced that they got in somehow: J. R. Hicks (1946)
- Don’t interfere with fairy tales if you want to live happily ever after: F. M. Fisher (1984)
- Few things are harder to put up with than the annoyance of a good example: Mark Twain, The Tragedy of Pudd’nhead Wilson (1894)
The good example is the CPI components. Shelter is about 35 percent of the CPI. You won’t wait for rent to fall or rent two homes based on expectation.
Nor will you stop eating, or driving, or have two medical operations.
It is irrelevant if consumers think prices will go up by 6 percent because they can’t do a damn thing about it.
Of the discretionary spending, consumers can cut back but they tend not to double up. That is what the Fed study shows.
Trump’s Policies
- Tariffs: Recessionary and Inflationary
- Deportations: Recessionary and disinflationary
- Border Shutdown: Recessionary and disinflationary
- Layoffs: Recessionary and disinflationary
- Student Loan Repayments: Recessionary and disinflationary
Related Posts
February 4, 2025: Job Openings Drop by 556,000 in December, Quits Show Job Finding Stress
Job openings have collapsed. And the number of quits confirms people are staying put.
February 5, 2025: ADP Payrolls Better than Expected But Two-Thirds of the Economy Has Stalled
ADP reported a better than expected 183,000 jobs in January, but small business trends are unsettling.
On February 14, I noted Retail Sales Crash – Did the Consumer Finally Throw in the Towel?
The Census Department shows huge across-the-board declines in multiple categories, down 0.9 percent overall.
February 19, 2025: Housing Starts Drop 9.8 Percent, Unable to Retain Any Traction
Housing starts have mostly been rangebound since late 2022 as high prices and high mortgage rates dampen demand.
February 20, 2025: How Will 77,000 DOGE Terminations Impact Unemployment and Jobs?
As of Feb. 13, 77,000 employees accepted the offer, according to White House press secretary Karoline Leavitt.
February 22, 2025: Trump Signs Order Cutting Off All Federal Benefits for Illegal Immigrants
Trump’s executive order is definitely legal. But what does it mean in practice?
The above related posts all have one thing in common: They are recessionary.
The die was cast back in the 1960’s when most of the western world political leaders set a course of living beyond our means. In the economic sphere Trump is neither a villian or a saviour.
There is a “quickening” going on and it is on purpose.
They put up Harris so Trump would be a shoe in. NOW, all ECON DATA will be sour when it was all PUDDING late last year.
The data is all bullshit.
Of course the consumer is pessimistic, as they should be. They have been beaten into submission by the last Administration. Harris / Biden gave away so much of “Our Citizens Oil” (including the SPR!) that Our Citizens pricing increased. Now are Families are suffering as a result. Harris / Biden gave away so much of “Our Money” to Help Other Countries, that now we have no money in FEMA to help out Our Citizens once again! Harris / Biden gave away so much of “Our Citizens Rental Property” to Illegals, that now Our Citizens can’t afford Rent!
I noticed a trend here. When the “Names Harris & Biden” come up, total chaos ensues and corruption runs rampant. Just a simple observation of Facts! Now those 2 incompetent fools are Democrats correct? Hmm… Funny how the same logic applies to Democrats Too! Whatever they touch, turns into a plundering of Taxpayer Dollars, and usually an illegal scam (BLM comes to mind), of some sort. Then they also, “NO Not Our Citizens” get Free Rent, Free Healthcare, Free Education, Free Cell Phones, Free Dental, Etc.
Free EVERYTHING!!! All at U.S. Citizens Expense. Each and Every Tax Paying Citizen, just PAID IN FULL” the Illegals Living, care, education, etc. Expenses On Your Back! How does that make you feel? Obviously enough to Sweep the Republicans back into office, and who could blame you?
Will they care long enough to stay on the ride ALL 4 Years is the unanswered and Only remaining question imo. If so… “We Have OUR COUNTRY” BACK!!!
Recessions are natural and people can get through them by doing whatever work is available and being frugal. Inflation however is a shame that erodes citizens and foreign investors confidence in the future of a country and a theft from savers. The effects of the interest rate repression and dollar debasement the incompetent and immoral Republicans and Democrats and their corporate donors have inflicted on the country is worse than a recession. We could have just dealt with a recession. Now we have inflation and an inevitable recession or worse. The sooner we start dealing with austerity, we will be on the road to recovery. The leaders should warn the people of whats ahead so more can be better prepared and have something set aside to help them get by.
I agree 100%. A significant criticism I’ll leavy against Trump is not going on national TV in prime time & delivering the justification for his agenda. He should have laid out a grand plan that explains exactly how he intends to meld mass deportations into a huge push to identify work being done by illegals that should be done by able bodied Americans. Deporting criminals & those with deportation notices isn’t going to be enough to get Americans into well-paying residential construction / services jobs and others.
DOGE is just as culpable. Right after Trumps speech a communications director for DOGE (NOT MUSK who is VERY polarizing) should have made their case as well. DOGE is severely lacking a point person whose sole job should be answering questions & demonstrating empathy in terms of the austerity they are helping to identify & carry out.
Good points Jay!
“They should have laid out a grand plan” I think all He could do, was a “General Summary” or risk “Prepared” backlash, once they know what’s moving. His splash of actions all at once, was far more effective, as we found out. I think they played that one well, as I was along that thought as first too.
“They should have a communications director for DOGE” I could not agree more. Musk is brilliant, but not the smoothest and best Speaker/Explainer imo. Let Him work behind the scenes, a bit more quiet, but just as diligent, and all encompassing!
Strange that consumer confidence is down when Trump and Musk have arrived to lead us to the Golden Age.
Perhaps it is because Trump has done so little with tariffs so far. Hopefully he will rectify that next week when he finally imposes 25% tariffs on Mexico and Canada (plus 10% on Canadian energy imports).
I am anxiously waiting to see the results of this real-world economics experiment. According to Trump, the tariffs will:
Bring back manufacturing and jobs. Eliminate the deficit and debt. Eliminate income taxes. Make Social Security, Medicare, and Medicaid solvent. Make us all rich. MAGA!
I say: “Let’s find out! Bring on the tariffs!”
In the meantime, I am struggling to understand some of Trump’s statements as they seem quite contradictory at times. Perhaps folks here can assist me with the following Trump statements:
We have more oil and gas than anyone else in the world. (Nope. Not even close.)
We don’t need “anything” from Canada. We don’t need their oil, gas, electricity, fertilizer, lumber, steel, etc . We don’t need their cars.
I want the Keystone pipeline to be built. NOW! (which would bring more oil from Canada to the US).
I want Canada to protect our border to stop the illegal immigrants and fentanyl. Which is strange, because it is OUR job to protect OUR border. Why do we need Canada’s help?
Canada stole our car industry and I want it back.
Canada should be the 51st state.
Thanks in advance.
Wow, the pipeline oil would bring in lots of tariffs.
Canada already sends 4.6 mbpd of oil to the US. Keystone would add another 0.8 mbpd. However, the company gave up on the pipeline and even gave back all the land that it had acquired. It wants no part of it now.
Thanks. I was surprised to hear Trump bring it up – hadn’t heard mention of it in yrs.
Yes. Surprising, since Trump claims we need nothing from Canada. Yet he wants a pipeline built to bring more oil from Canada. Plus he wants to put a 10% tariff on all that oil.
It is all talk and all contradictions and contraindications now.
This will be par for the course, of course, of course.
A HORSE IS A HORSE.
Hmmmm,
Gee, Trump has been President for a couple days just over a month and you expect everything to be done already.
I know Trump is really good at a lot of things especially living in peoples’ heads. He must be living in yours so mission accomplished.
I really think that the only things that have had any impact so far are the closing of the border and a few deportations and arrests.
His budget hadn’t been passed and untill his tax package is passed everything up to those things happening still belongs to the Biden government.
Get real and stop acting like a petulant 2st grader.
Exactly! In my book, sarcasm (PapaD) and exaggerations (Trump) are exactly alike. Neither is to be taken seriously. Am I pleased with Trump’s rhetoric? No, but I realize it’s his way of negotiating, which as POTUS, he has every right to engage in his means of pushing friends & foes to the negotiation table which is then handled primarily by his surrogates.
I repeat:
“Perhaps it is because Trump has done so little with tariffs so far. Hopefully he will rectify that next week when he finally imposes 25% tariffs on Mexico and Canada (plus 10% on Canadian energy imports).”
The clock is ticking. I will be disappointed if he doesn’t follow through as promised.
Also, let me help you. I could be a 1st grader or a 2nd grader. Not a 2st grader.
There is a test at a Science Exhibit in Phoenix. 5 years ago, my 69 year old friend and I took it and we were graded at 12 years old. We LOL’d so hard, that they SHUSHED US!
I have been on Medicare for 5 years. Medicare completely covers a yearly physical which includes a blood test. I just rec’d an Explanation-of-Benefits for my recent physical. The amount the providers have billed my Medicare plan amounted to $1335.84. WTF? Running the blood thru a centrifuge and analysis machine shouldn’t cost anywhere near the billed amount. No wonder consumer confidence is down.
My heart surgery was $356,000. Medicare allowed $65K.
Such a sharp drop does not jive with approval polls for the new Admin and its actions. Someone is wrong.
I invite the optimists to spend: put your cash out there where your mouth is. Lead the way. You first. Money talks and BS walks.
Yes, buy Trump meme coins. You will immediately feel better.
If expectations don’t matter, why do so many market traders and analysts use it to ‘predict’ a recession when the Expectations Index drops below 80?
$SPX 1D: Feb 18 closed > Jan 24 high. Feb 19 closed even higher, but Feb 20 fu*ked it up. Results: SPX plunged < Feb 3 low, but popped up.
Mr CSPAN: QQQ 1D: Feb 18 was the first close > Dec 16 closed. Feb 19 made a new all time high, but failed to close above Feb 18 high. Results: QQQ plunged below Jan 27 low and popped up to Jan 27 close. Mish: please vote NO.
“Consumers are concerned over inflation. Recession should be the bigger fear.”
Consumers obviously now fear both. Trump’s tariff shock is a textbook stagflationary shock that will reduce activity and increase inflation (just like the oil price shocks in the 1970s). How one person’s economic illiteracy can do so much damage is astounding. But as Keynes said, madmen in authority often hear voices in the air. On the bright but slightly hilarious side, Trump voters believe there will be deflation in the future (as per Michigan survey).
see: US Home Prices Accelerated To New Record High In December (Except Tampa Again!) | ZeroHedge
We have stagflation, business stagnation accompanied by inflation.
THANKS TRUMP! Whereas the US had been by far the fastest growing major (G4) developed economy late last year and into January according to the PMIs, February saw the US expansion falter to a near-stalled pace; a rate which was even weaker than rates seen in Japan and the UK and only marginally above that of the eurozone.https://www.spglobal.com/marketintelligence/en/mi/research-analysis/us-economic-growth-falters-and-goods-prices-spike-higher-according-to-flash-pmi-surveys.html
This is all true if you believe in Guvment Numbahs!
its only just begun: How Tariffs Could Shock America’s Power SystemTransformers used in power grids are especially vulnerable to trade disruptionshttps://archive.is/asODD#selection-5751.0-5755.79
Austerity beckons. Have been doing without for so long, have simply lost interest. Too old and tired to care. Take pleasure in small things.
Nor will you stop eating, or driving, or have two medical operations.
—
Not true. I know some older folks who are giving up on their health in favor of death. Some have cut off eating as much or even going for a walk. Some are refusing medical interventions because they are going to be too expensive. We will see more of this as the economy goes into a tailspin.
This can only be true of those who have assets they wish to pass on to heirs.
The truly poor would just get that medical intervention because they’d get it for free in the emergency room and never have to pay since they have nothing to seize.
The medicaid scam these days is having a family member get paid for helping a loved one.
Its much cheaper than putting the loved one in a facility.
Jesus wept!
Not true. The largest number of personal bankruptcies are still due to medical debt. The insurance companies and health providers use the same companies to go after money and assets that banks or credit card companies do.. They start putting liens on your home in some states.
I think you misunderstood what I wrote. What you say above is 100% true about medical bankruptcy.
What I said is that the people you know who are forgoing health treatment *must* be people with assets (homes, stocks etc) that they want to pass on to their heirs. That’s because they want to avoid losing them to medical debt.
Truly poor people don’t care. That’s because they don’t have anything to seize. They just get the medical treatment and you and I pay for it.
100% correct.
Mangione effect. Good luck!
One of our best friends is a multi-millionaire (inherited from Daddy) and she has it all in a blind trust. She has 100% medicaid coverage, vision, teeth, etc.
She is now on a Panama (Trum-Panama Canal) Canal cruise.
I hope everyone who voted for Trump is happy so far. We will now join the world in having a poorer class similar to a developing country as this is what happens in autocracies. The standard of living is about drop massively for about 80% of the population. And if you have a problem it cannot be solved at the ballot box. Good luck to the bottom 80%. Life is about suck big time for you.
You would have thought something would have been learned from Brexit. The newest “emerging market” on the planet. You can’t fix stupid.
Here in the USA we fix stupid by making it more widespread in the populace, then fewer people feel stupid when everyone around descends to their level of intellectual potential.
Exhibit 1A: 2024 Pres election
No Retard Left Behind
Not sure the EU is any better off than the UK these days. We can tell that by looking at how dysfunctional all the governments are in France/Germany/Italy etc. That’s happening because those countries economies are in the same trouble as the UKs.
See you at the Wellness Farm!
We easily beat those countries when it comes to dysfunctional governance.
Yes, a perfect example is the 4 years of the Biden government.
Yeah,
Too many examples of that here. Never get tired of reading all the ridiculous comments such as yours and Voodoo’s.
Economics and Finance IQ’s of about 10.
Will join? Did you miss all the economic complaining during Biden? People in L.A. complained the rent was too high. Some 10 million third worlders were imported into the U.S. during Biden. That was a drop in U.S. standard of living, with so many poor imported. Autocracy is a narrative.
Unless you’ve been asleep, life expectancy has been falling in the US. The gap widens between men and women. But its orange man bad’s fault? Personally I look forward to RFK shaking up the shit show of our so called pharmaceutical medical complex. And if standard of living means cheap Chinese shit at Walmart and on Amazon, while jobs go to illegal aliens, keep your standard of living. This is going to be a seismic shift. No guarantees.
Women take their pharmaceuticals and listen to expert medical advice (like my Mom, well into her 90’s). Men tend to smoke, drink, lose their temper, and blather a lot, also dying younger and more violently.
You are talking about us American men? Be a bit more patriotic!
True but women have it somewhat easier. They aren’t subject to forced military service, and many of the stress’s of male work, like construction, dangerous work etc. 1950’s housewives didn’t even work, so no commutes or work stress.
Hi Voodoo. I do not vote. And I am very happy. Because whether it is Trump or Biden or someone else makes no difference to me.
I am constantly amused by many folks here who think 1) Government messes everything up, and yet 2) Vote for X, and their government will make my life better! LOL!
If you want to make your life better, then get off your ass and just do it. Don’t wait for President X to do it for you.
The important thing is to take advantage of the opportunities that exist from President X, whatever they may be.
I rarely comment here during the daytime because I am too busy making my life better. While most here waste their time complaining about things that they have no control over.
Come on VOODOO, your name gives us a clue as to the last 40 years of Econ 101. None of this is sudden in a time span sense.
We are not SUDDENLY falling off of a cliff.
“They say Haynes when I say they say Haynes.”
“They say Recession when I say they say Recession.”
It’s all smoke and mirrors. NOTHING is happening Suddenly. You knew that, right?
GDP components: 1) Consumption: up. 2) Nonresidential investment (factories): up. 3) Residential fix investment: up. 4) Change in Inventory: up. 5) Import: up (less import is positive) 6) Export: down. 7) Gov: down.
In the next few years highly skilled workers will earn and consume more. We will import less from China and Mexico. US made inventory will rise. More people more
apartments and houses. The Trump/Vance gov will be smaller. Biden destroyed Intel. He promised them money, but gave them nothing. Josh Shapiro is Trump’s enemy #1.
“In the next few years highly skilled workers will earn and consume more.”
in the next few years, millions of people are going to retire and more will die. There will also be many people deported, I heard up to 20 million and birth rates have been at all time low for decades.
You need to rethink your fantasies.
That’s CSPAN fantasies.
“AI revolution” = recessionary and disinflationary
You left one out: stock market crash – disinflationary.
Trump says the Mexico/Canada tariffs are back on next week. Let’s hope it’s not another tariff tease, I want the golden age to start!
https://www.cnbc.com/2025/02/24/trump-says-tariffs-on-canada-and-mexico-will-go-forward.html
Show me those big beautiful tariffs then “Cry havoc and let loose the tariffs of trade war!”
Mish deleted my answer !
My stocks are marching downward. I have a smaller allocation, and reasons to hold out. We’ll see how far this goes, and what Mr. and Mrs. USA will think, of their nest eggs. This is the one thing that might get Trump’s attention, other than sycophants and his elaborate fantasies about the world, and how things work.
I would buy Trump meme coins (and you can even diversify by buying Melania coins).
Returning money to the people who earn it.
Something most do not understand as they have never experienced it.
Listening to status quo DC supporting pundits squealing.
Priceless.
So roads, water systems, well-regulated bandwidths, are not a return? Like freeways, commercial aircraft, the Internet, silicon chips, and other things originally publlc goods? War victory? It always makes me laugh when somebody is floating along on a public sidewalk with police protection complaining about how nothing gov does works. Hallucinating.
When was the last time a new Interstate highway was built in the US?
Why does the quality of public infrastructure in the US get rated around the D level?
Police protection?
Are you living in the real world? The main job of police in the USA is to collect revenue from traffic stops and speeding tickets.
The next job is to once in while arrest people after crimes have been committed.
And maybe undertake investigating crimes that have still no arrests and even then the rate at which crimes are solved is pathetic.
No where in the list of police jobs is protection.
Don’t forget the deficit busting Republican tax bill in the list of Trump Policies.
https://finance.yahoo.com/news/unforgiving-math-has-republicans-asking-for-prayer-as-they-try-to-move-forward-on-tax-cuts-151932300.html
All things that need to happen. Popping an asset bubble is healthy. There is no free money tree.
Hey midnight .. notice the 10 year has dropped from 4.5 to 4.3? Trump wants low rates and he will get low rates. Remember where you heard it first. 🙂
Hello Scott. You said Fed going to ZIRP. The Fed and Trump don’t control the 10 year. We’ve been over this. And that’s hardly a drop. Rates aren’t too high. Asset prices are.
Driving down the yield means bidding up the bond prices. The Fed has an unlimited amount of currency available, just like Japan has an unlimited amount. They both just buy every bond they can find (price up) and then the yield (going the other way) pushes down to zero — long bonds included. Get your nose out of the economics books. 🙂 Trump wants zero. Its headed to zero.
From the people who have been telling us Russia has owned Trump since the 1980s? That’s where I heard it, and they sure get the credit for saying it. Trump’s ONLY big concern is paying off debt on his RE portfolio. Anyone who thinks otherwise is yet another of his innumerable victims of the Don the Con Grift Factory.
The Fed has little to no effect on the 10 year.
Ah yes, from “Trump woo hoo, end Bidenflation!”
to
“BOHICA” a classic bait and switch.
All the talk about Trump doing this, that, or the other doesn’t really matter. He doesn’t control rates, or bubbles, or consumption. Sure he can affect them a bit with his tariffs, trade policies, tax cuts, and govt layoffs, but by and large the consumer fuels the economy, and all but the top 10% are tapped out. In other words, look out below.
Recessions are a good thing as they correct most of the problems caused by the damn bubbles in the first place. I’m looking forward to the correction, as I’d like to buy a damn home at some point in the next few years that doesn’t entail me spending 50% of my take-home on the monthly nut.
Unfortunately for you a correction in prices won’t help with taxes and insurance both of which will continue to rise unabated.
A higher and higher percentage of the monthly nut is now composed of those two components so you better plan to earn more rather than wait for prices to drop.
You must be on the wrong website. The majority of people here ‘know’ that Biden caused any perceived economic wrong they can dream up – from inflation (even with Fed rates at 0%), ‘bad’ economy (with with positive real GDP all four years and low unemployment rate), etc…
So they ‘know’ Presidents cause these issues. So you must ‘know’ nothing.
In Biden’s case it was his Admin or puppeteers if you prefer and Congress juicing up already ridiculous levels of government spending with the ironically name Inflation Reduction Act, along with a massive increase in illegal aliens. This is not rocket science. Keep up.
This time, I’m the puppet master.
You should try to keep or bone up on your reading comprehension. As you said yourself, all that came from Congress, including a Republican House. Biden can’t craft legislation; he can only confirm or veto it.
On the other hand, Trump and Musk are rampaging thru the economy solely on their own right now. The Republican Congress hasn’t voted in anything yet. So what is happening now with consumer and business confidence is either directly Trump or indirectly the recognition that the Republicans won’t keep the ship on keel with Trump at the helm
Yeah,
Everything is Trump’s fault especially the last four years even when he wasn’t President.
And amazing that in 30 days or so he has caused everything to fall apart with no budget.
Geez, the guy really is a superman.
You should read the comments above before posting; otherwise, you look like you shoot from the hip without ever thinking.
Real GDP increased every quarter under Biden’s Presidency, and the unemployment rate was below a long-term historical average the entire time. So no, I’m not blaming Trump for that because he does not deserve that credit.
But you’re about to see a reversal of all of that – and it will be due to Trump. Nothing has fallen apart yet, but this blogpost is about what’s coming now that Trump has upended everything in his first 30 days