Recent US tariff policies are stirring up inflation concerns even as economic growth shows signs of cooling. According to fresh data, the US economy contracted at an annualized rate of 0.2 percent in the first quarter of 2025—a slight revision from earlier estimates and the first shrinkage in three years.
This downturn is mainly linked to a surge in imports that widened the trade deficit, cutting 4.9 percentage points from GDP, along with a pullback in government spending. Although the core Personal Consumption Expenditures (PCE) price index was slightly revised down to a 3.4 percent annualized increase, inflation pressures remain a hot topic, with everyone eagerly awaiting the April data. 📊
Federal Reserve officials are treading carefully amid this uncertainty, holding off on policy changes until clearer signs of inflation and economic trends come to light. Notably, Federal Reserve Bank of Atlanta President Raphael Bostic has suggested only one interest-rate cut this year due to these mixed signals. 🤔
Consumer sentiment is also on edge. The Conference Board’s Expectations Index jumped 17.4 points to 72.8, although it still lags behind the threshold that typically hints at a looming recession. Meanwhile, Jamie Dimon, CEO of JPMorgan Chase, warned that the worst-case scenario could be stagflation—a blend of sluggish growth paired with stubbornly high inflation. 🚨
As the US navigates these challenges, the dynamic mix of trade policies, inflation pressures, and consumer confidence will be key to understanding the economic road ahead. Stay tuned as we continue to break down this unfolding story!
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US tariff policies heighten inflation concerns amid slowing economy
cgtn.com
