US consumer sentiment has declined for the second consecutive month, with Americans fearing higher inflation on the horizon. The University of Michigan survey showed a 10% decline in February, driven by worries over tariffs potentially jacking up prices.
Trump blamed his predecessor for the current economic woes, but Americans are now souring on his handling of inflation. A CNN poll found that nearly two-thirds of US adults feel Trump is not doing enough to address inflation.
The latest uptick in inflation occurred during Biden’s presidency, but experts say it was a combination of factors, including pandemic shocks to supply and demand, the Russia-Ukraine war, and pent-up demand from stimulative policies. The Trump administration’s aggressive approach to tariffs has contributed to the souring economic mood, with economists warning that trade policy uncertainty could stoke inflation.
The Federal Reserve closely watches consumer perceptions of prices, as they can sometimes be self-fulfilling. While short-run expectations rose to 3.5% in February, longer-run expectations remained relatively stable at 3.2%. Experts say the Fed should consider a more nuanced approach to addressing inflation, taking into account both the impact on the price level and the potential for sustained or long-term effects.
As the economic outlook continues to darken, Trump’s blame game may not be enough to shift the narrative. With inflation surging and consumer sentiment declining, it remains to be seen whether the administration can turn things around before the next election cycle.
Source: https://edition.cnn.com/2025/02/21/economy/consumer-sentiment-inflation-tariffs/index.html