Treasury
Tariffs hit consumer confidence, Michigan survey shows 'dreadful' decline
The latest University of Michigan survey shows the consumer sentiment index plunged 11% month-over-month in March, down 22% cumulatively since December, with long-term inflation expectations climbing at the fastest pace since 1993. Tariffs and uncertainty over Trump administration policies, compounded by falling stock markets, have broadly worsened consumer sentiment across all groups. Pantheon Macroeconomics' chief economist called this a 'dreadful' report. Federal Reserve officials may focus on rising long-term inflation expectations at their March 18-19 meeting.
Inflation rise below expectations, new tariffs raise price concerns
Data from the U.S. Bureau of Labor Statistics shows that core CPI rose 0.2% month-on-month in February, below expectations, with the year-on-year increase falling to 3.1%, the lowest since 2021. However, the EU and Canada announced retaliatory tariffs on U.S. goods, intensifying concerns about inflation and economic growth. Federal Reserve Chair Powell stated that rate cuts would be postponed, and market expectations for a rate cut in June have decreased.
NFIB Survey: Small Business Optimism Declines Due to 'Uncertainty Shock'
A survey released Tuesday by the National Federation of Independent Business (NFIB) shows that small business owners' optimism declined in February, with the share who think it is a good time to expand falling to 12%, the lowest since April 2020. Under inflationary pressures, more businesses are raising prices, and hiring and capital expenditure plans are becoming cautious. NFIB Chief Economist Bill Dunkelberg said, 'Uncertainty is high and rising, and inflation remains a major problem.'
Wolters Kluwer survey: 91% of business economists expect tariffs to significantly push up inflation
The latest Wolters Kluwer survey shows that 91% of business economists expect tariffs to significantly boost inflation, with this year's inflation expectation rising to 2.6%, well above the Fed's 2% target; economic growth expectations have slowed to 2%, and the probability of a recession has risen to 31%. Most economists expect the Fed to hold steady at its March meeting, with a possible rate cut only in June or later.
Fed holds steady, assessing impact of Trump tariff policies—Powell
Federal Reserve Chair Powell said on March 7 that the central bank has paused adjusting its benchmark interest rate while assessing the impact of policies such as the Trump administration's tariffs. He noted high policy uncertainty and that the path of inflation decline may be "bumpy," but the labor market remains stable.
Bessent Says 'Not Worried About Inflation,' Backs Trade Policy Amid Trump's Tariff Offensive
U.S. Treasury Secretary Bessent responded to questions on Thursday after a speech at the Economic Club of New York, saying he is not worried that Trump's tariffs will cause inflation, believing the tariffs will bring a one-time price adjustment and can fund tax cuts. He also urged the Federal Reserve to revisit its 'transitory' inflation assessment. Boston Fed research shows that a 25% tariff on goods from Canada and Mexico, plus a 10% tariff on Chinese goods, could push core PCE inflation up by 0.5 to 0.8 percentage points. S&P Global's chief economist warned there are no winners in a trade war. The Trump administration has announced a suspension of the 25% tariff on goods covered by the USMCA until April 2.
New York Fed Survey: Businesses Expect Inflation to Rise to 4% at Most Over the Next Year
The latest New York Fed survey shows that surveyed businesses expect inflation to potentially rise to 4% over the next year, with tariff policies becoming a major factor driving up costs. Businesses reliant on imports expect higher cost increases, reaching around 9%.
Fed's Williams: Tariffs may 'relatively quickly' boost inflation, but transmission channels differ
New York Fed President John Williams predicted that U.S. tariffs effective March 4 will relatively quickly raise prices of imported consumer goods, while prices of U.S.-made goods using imported intermediate inputs will rise more gradually. Williams said in a Bloomberg webcast that the pass-through of tariffs to consumer prices is 'relatively quick,' while the pass-through of tariffs on intermediate inputs is slower and may have a more persistent impact. He also emphasized that despite high trade policy uncertainty, the U.S. economy is in a 'good starting position,' with unemployment at 4% and inflation about 0.5 percentage points above the Fed's 2% target.
Trump Tariffs: As the March Deadline Approaches, the Game Enters Its Final Countdown
Since February 1, when Trump announced tariffs on Canada, Mexico, and China, the trade war has continued to escalate. The 25% tariffs on Canada and Mexico are set to take effect on March 4, but uncertainty remains among markets and analysts. This article outlines key timelines, statements from various parties, and recommendations for corporate responses.
NABE Survey: Inflation May Stay Above Fed's 2% Target Until 2027 and Beyond
A survey released Monday by the National Association for Business Economics (NABE) shows that inflation may remain above the Fed's 2% target until 2027 or later. The survey found that 40% of respondent economists predict a recession next year, mainly due to changes in the Trump administration's economic policies. Sarah Wolfe of Morgan Stanley Asset Management noted that more aggressive trade and immigration policies are expected to have the greatest impact on growth and inflation prospects.