US economic growth is facing growing uncertainty due to ongoing tariff tensions with major trading partners. While recent data shows little evidence of deterioration in spending, investment, or hiring, worries about the outlook are mounting.
The Trump administration’s policies have added complexity to business decisions, particularly for consumers whose incomes depend on federal funding. This risk may lead them to be more cautious in their spending habits.
However, new growth concerns coincide with a steep drop in Treasury yields, which reflects bond investors’ expectations of economic growth. Chief economists warn that households may hold back purchases, including cars and vacation travel plans, as the risks rise.
The Federal Reserve has expressed caution, noting that elevated uncertainty might weigh on growth. Some clients are asking if it’s time to consider using the word “recession” again. While predictions of a major slowdown or recession have repeatedly been wrong in recent years, the number of warning signs is rising.
Despite the new administration’s policies creating tailwinds from deregulation and tax cuts, concerns persist. The US economy is a strong ship, but it appears to be facing increasing uncertainty.
Source: https://www.axios.com/2025/02/27/trump-tariffs-doge-growth-risks