MY TURN: Mid-year fog
Mitchell
In January 2025, the U.S. economy was expected to continue to grow, but more slowly than in 2024 with tight labor markets, lagged effects of tightened monetary policy, fading pandemic fiscal stimulus and capacity constraints. The new administration implied a mix of pro-growth deregulation and fiscal policy and drags from trade and immigration policy. Job openings had declined, but unemployment remained low, and inflation hovered above the Fed’s target.
The spring has been marked by chaotic trade policy, tariffs on specific goods such as cars, steel and aluminum announced “reciprocal tariffs” on April 2 then delayed on the 9th, a 145% tariff on China, since relaxed, and a general 10% tariff on imported goods. The final nail was hammered in the coffin of the post World War II system of generally falling trade barriers.
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