The Economy is Slipping
Author: Greg Valliere
March 4, 2025
DONALD TRUMP WILL HAVE TO ADDRESS UKRAINE, TARIFFS and other explosive issues in his speech tonight, and he can’t overlook the one subject that the public most cares about — the economy.
IN JUST THE PAST COUPLE OF WEEKS, the economy has hit a major pothole. The widely-watched Atlanta Fed “GDP Now” forecast has plunged.
WE HAVE A COLLEAGUE WHO ALWAYS PREACHES THAT CONFIDENCE is the key economic factor for the markets. But investors seemed confused yesterday by a trade war and the prospect of a budget crisis later in March.
WE’RE HEARING THAT MORE MASSIVE LAYOFFS are coming — from the Defense Department to HHS. This will snowball, in our opinion, with consumers holding back on spending, because they don’t know what lies ahead.
POLLS THIS WEEK have showed the public has deep anxiety over inflation and a trade war with Mexico, China and Canada. And Trump’s plunging polls on inflation and the economy are eroding his political capital.
THE TRADE WAR MAKES LITTLE SENSE: We have a friend in Toronto who points out that Canada has complied with virtually every demand from Trump — Ottawa has appointed a “fentanyl czar,” has committed $1 billion to border security, has offered a rare mineral alliance with the U.S., etc. Yet Trump wants to crush Canadian manufacturing and shift it to the U.S.
SO THE RETALIATION WILL CONTINUE: Ontario Premier Doug Ford asserted yesterday that he is prepared to cut off electricity exports to the U.S. “with a smile on my face.”
IRONICALLY, A UKRAINE deal seems more imminent than a tariff settlement or a budget agreement. We’re hearing that talks between Washington and Kyiv could resume soon.
THERE’S A NEW DISCLOSURE FROM WASHINGTON, often contradictory and confusing, every couple of hours as this city descends into chaos.
DON’T BELIEVE US? Just talk to Republicans, who are now in a bitter dispute between the House and Senate on the budget, with a government shutdown less than two weeks away — still another reason to worry about the economy.
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