On the campaign trail, Trump claimed stagflation was “worse than inflation” and that it spelled “the death of the American Dream.” Today, the Federal Reserve outlined how Trump’s chaotic economic policies are creating the early signs of stagflation. Thanks to Trump’s unnecessary trade war, there are deeply troubling signs for the future of the American economy, businesses on Main Street, and American households trying to make ends meet.
Donald Trump and the Republican Party’s chaotic economic policies and an escalating trade war continue the pattern of betrayal: their election promises have been abandoned in favor of erratic policies that benefit insiders and billionaires, while everyday families suffer
Fed officials specifically called out Trump’s tariffs as a driving factor in rising inflation and increasing economic uncertainty. Officials said they expected inflation to increase by an average rate of 2.7% this year, up from a previous estimate of 2.5%.
The Fed rarely comments directly on specific economic policies, indicating serious concern about the unusually elevated uncertainty Trump has already spawned in the stock market. Markets famously hate uncertainty. Last week, the S&P 500 closed more than 10% down from its peak just a month ago. Americans saw their retirement accounts suffer big hits and business leaders warned Trump’s chaotic economic policies made it virtually impossible to plan for the future.
In addition, Fed officials cut their economic growth forecasts down to 1.7%, down from an estimate of 2.1% in December. Officials also revised their projections for GDP growth in 2026 and 2027, down to 1.8%.
“The Fed sees the writing on the wall—stagflation is looming, and it’s all thanks to the administration’s disastrous mix of economic policies where growth is threatened while inflation persists,” said American Bridge 21st Century president Pat Dennis. “We’re on the fast track back to the economic nightmare of the 1970s that would shrink the economy, cost Americans their jobs, and send prices skyrocketing even higher. This economic chaos is only making things worse for families already living in fear of losing their health care and Social Security. Financial uncertainty, medical insecurity, and a gutted safety net – this is the crisis they’ve created. The Republicans propping up Trump’s economic agenda are likely to avoid even more town halls as shit truly starts hitting the fan for American families.”
Published: Mar 19, 2025 | Last Modified: Mar 20, 2025