How bad is it?
Trump’s honeymoon with the financial markets is over. The US economy looks like it is rolling over. Goldman just “gave up” on their above-consensus view. There are worrying signs in terms of inflation. Let’s have a look at the latest data and views.
So much uncertainty
Trade policy uncertainty has spiked higher.
Source: Deutsche
Tariffs will lift US structural inflation
Tariffs will lift US structural inflation expectations from an already elevated level.
Source: BCA
Inflation expectations at a 30 year high
Uncertainty about US policy, especially trade policy, has contributed to substantial rises in inflation uncertainty and in the University of Michigan’s measure of long-term US household inflation expectations.
Source: University of Michigan
Who let the DOGE out?
Recent events have shifted risks in the direction of a larger fiscal drag than research assumes. Whether spending cuts materialize from DOGE or the budget process, they are likely to come in categories with high multipliers. On employment, don’t forget about the freeze in federal hires…
Source: Morgan Stanley
The government recession has begun
Government + ‘education & health’ as % of total payroll growth.
Source: BofA
Doubting Trump and ‘US exceptionalism’?
Trump rally fades again as policy plans become clear – tariffs were not priced in by markets.
Source: Macrobond
Starting to worry about growth?
Markets are pricing significantly lower Fed rates in 2026.
Source: Macrobond
US growth rolling over as Trump stimulus fails to materialize?
Unsustainable demand bump? Consumers have turned more negative since inauguration.
Source: Macrobond
Free falling
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -1.5 percent on February 28.
