Rawds fear fears with the speed of Trump's definitions and the economy is slowing down

The intimidation of growth in the economy was accompanied by fears of recovery in inflation, which is likely to prove an ugly situation that the United States has not seen for 50 years.

Fears of “recession” have come as president Donald Trump It seems determined A coast tariff for almost anything This comes to the country at the same time as multiple indicators refer to withdrawal of activity.

This double threat to high prices and slower growth causes anxiety between consumers, business leaders and policy makers, not to mention this Investors who have been subjected to shares The bonds have been sweeping recently.

“From a direction, it is an order,” said Mawody's Ankaytics, Moods Zandics. “Supreme inflation and weaker economic growth is the result of politics – the policy of customs tariffs and the immigration policy.”

This phenomenon, which has not been seen from the dark days of excessive inflation and the growth in the 1970s and early eighties, is manifested in the first place recently in the “soft” data such as the contributions of feelings and the indexes of the director of supply.

At least among consumers, the long -term inflation expectations are expected for nearly 30 years while general feelings are witnessing their lowest levels in several years. Consumer spending decreased in January Almost more than four years, although the income has increased sharply, according to the report of the Ministry of Commerce on Friday.

On Monday, and Survey of the Institute for the Supply Manufacturer for the purchase directors It showed that the factory activity barely expanded in February, while new requests fell almost more than five years and prices jumped with the highest monthly margin more than a year ago.

After the ISM report, the Federal Atlanta reserves gross domestic product The circulating economic data scale reduced its projection of economic growth in the first quarter to an annual decrease of 2.8 %. If this continues, that will be the first negative growth number since the first quarter of 2022 and the worst diving since Covid turned off in early 2020.

“The inflation expectations are rising. People are nervous and not sure of growth,” Zandy said. “In a way, we are moving towards the recession, but we will not come close to any place from the recession that we had in the 1970s and 1980s because the Federal Reserve will not allow this.”

In fact, the markets are pricing in a greater opportunity to start the Federal Reserve Bank to reduce interest rates in June, and can wear three quarters of a percentage of the main borrowing rate this year as a way to go to any economic slowdown.

But Zandy believes that the reaction of the Federal Reserve may do the exact opposite – raising rates to close inflation, in the context of former President Paul Volker, who traveled strongly in the early eighties and withdrawing the economy to recession. “If it seems to be a real stagnation with slow growth, they will sacrifice the economy,” he said.

Selling in stocks

Converged factors caused waves in Wall Street, where the shares were in the sale situation this month, which bought the gains that obtained the elections in the Trump elections in November.

Although the Dow Jones industrial average decreased again on Tuesday, which is about 4.5 % during the first days of March, the sale did not feel the rush in particular and CBOE Flat indicatorIt was a measure of fear in the market, only 23 in the afternoon on Tuesday, not much higher than its average in the long run. The markets were Well off their sitting low In the afternoon trading.

“This is definitely not the right time to hit the panic button,” said Marc Hackett, the chief strategy of the market in NATORWIDE. “At this point, I still in the camp is that this is a healthy -reset of expectations.”

However, the stocks are not only the signs of fear.

The treasury returns have declined in recent days after its rise since September. The normative note revenue decreased for 10 years to about 4.2 %, after about half a percentage of its peak in January and under the note of 3 months, a reliable stagnation indicator dating back to World War II called the inverted return curve. Revenue moves against the price, so the low yield indicates the appetite of a larger investor for fixed -income securities.

Hackett said he feared a “vicious circle” of the activity created by the amazing indicators of feelings that could turn into a complete crisis. Economists and executive managers of men see the definitions that reach the prices of food, vehicles and electricity and a variety of other elements.

He said the recession “is definitely something that raises attention to it now, more than it was a while ago.” “We have to see. This is a collapse in feelings, such a change in the way people see things, and the level of emotion is so high at the present time that it will begin to influence behavior.”

The White House sees “the greatest America”

For their part, White House officials maintain that short -term pain will occur by tariffing long -term benefits that will bring them. Trump described the duties as a way to create a stronger manufacturing base in the United States, which is primarily a service economy.

In an interview with CNBC on Tuesday, Trade Minister Howard Lootnick admitted that “there may be short -term price movements. But in the long run, it will be completely different.” Market inflation expectations are in line with this feeling. One scale, measures It spreads between the treasury revenues for a period of 5 years against inflationHe is at the lowest level in nearly two years.

“This will be the greatest America. We will have a balanced budget. Upper Egypt will decrease, I mean 100 basis points, 150 lower basis points,” Lootnick added. “This president will present all these things and lead manufacturing here.”

Likewise, Treasury Secretary Scott Bessent Fox News said that “there will be a transitional period” and said that the administration's focus on the main street is more than Wall Street.

“The Wall Street has ended wonderfully. Wall Street can continue to work well, but we have a focus on small and consumer business,” he said. “We will rebalance the economy, and we will restore manufacturing functions to the home.”

Important evidence about the location of the economy should come from the non -agricultural salary statements report on Friday. If the number of jobs is good, it may enhance the idea that solid data has remained solid even with the transformation of feelings.

But if the report shows that the labor market follows while the wages are higher, it may add to the recession gossip.

“We must be committed. There is the possibility that the term stagnation in itself, by talking about it, can appear some of it,” said Hackett, a strategic expert at the country level. “I am not in a camp between length, but this is the disaster scenario.”