Americans Becoming Pessimistic About Trump’s Economic Policies

A recent CNN poll by SSRS reveals growing scepticism about President Donald Trump’s economic policies, with 57% of respondents indicating that his decisions have created an unstable economic environment, citing global trade tensions as a key factor.

The poll also found that 51% of Americans believe the economy will worsen within the next year, up from 44% in January.

Furthermore, 55% of respondents felt that Trump’s cuts to federal programmes would harm the economy.

Many also expressed concern about rising consumer prices, with most believing his policies could exacerbate inflation rather than alleviate it.

In recent weeks, Trump has implemented significant tariffs, including 25% on Mexican and Canadian imports and 10% on Chinese goods, alongside tax cuts, reduced government spending, and deregulation.

These policies have created market uncertainty, triggering sharp declines in both traditional stock and crypto markets.

The growing market instability highlights mounting concerns over the long-term impact of the president's economic strategy.

Concerns Over Stagflation and Potential Recession Mount

President Trump’s economic policies have sparked growing concerns about the potential onset of a recession this year.

Several indicators, including a rise in unemployment in February, suggest a slowdown in economic activity following his presidency.

The February Consumer Price Index (CPI) report showed a 2.8% year-on-year inflation increase, slightly lower than January’s 3.0%.

While inflation has cooled, questions about a potential recession remain, as such downturns typically involve a prolonged and sharp decline in economic activity.

Alex Jacquez, policy and advocacy chief at Groundwork Collective, noted that the economy hinges on business investment, hiring, and consumer spending. Jacquez warned that consumer spending could decrease if people fear job losses or further layoffs.

This sentiment is reflected in a recent CNN poll, where 71% of respondents reported altering their grocery choices to stay within budget, and 67% cut back on discretionary spending like entertainment.

JPMorgan Chase has predicted a 40% chance of a recession if Trump persists with his "extreme" economic policies.

Goldman Sachs has also raised the likelihood of a recession, increasing its forecast from 15% to 20% due to factors like the sluggish housing market, tariffs, and government spending cuts.

Economist Justin Wolfers cautioned that Trump's chaotic policy approach could trigger a recession.

Additionally, the prediction market Polymarket currently places a 39% chance on a US recession in 2025, further highlighting growing concerns about the economic outlook.

February Saw a Drastic Decline in Consumer Confidence

Consumer confidence took a sharp dive in February, falling to its lowest point in three and a half years, dropping from 105.3 in January to 98.3.

This decline reflects growing concern among Americans about the worsening economic conditions, with rising worries about 12-month inflation.

Christopher Rupkey, chief economist at FWDBONDS, attributed the drop in confidence to an increasingly pessimistic outlook among consumers.

Rupkey pointed out that the Trump administration was the first to threaten large-scale federal employee layoffs, further fueling uncertainty.

He also warned that these policies could potentially lead to an economic slowdown as early as the first quarter of this year.