Inflation is staying steady at 2.5%, but there are significant consumer consumption changes. The elephant in the room is the aggressive trade policy from POTUS. The tariffs raise a lot of uncertainty within the economy, as they would cause prices to rise. Energy prices and food prices were decreasing and stabilizing respectfully. But now, economists are unsure of the consequences to the president's new policies and threats of tariffs. Consumers seemed to cut back on discretionary purchases in response to the uncertainties. This could change drastically as inflation fully adjusts to the tariff decisions.
https://www.cnn.com/2025/03/28/economy/us-pce-spending-inflation-february/index.html
2 comments:
With all the uncertainty from Trump's tariffs, it makes sense that people are holding back on spending, especially on things they don’t really need. It’ll be interesting to see how things change once inflation catches up with those price hikes.
I wonder whether it is wise to continue reducing my discretionary spending, given the uncertainty surrounding Trump’s tariff policies and their potential impact on future prices.
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