Economy

The muted impact Trump’s tariffs have had on inflation has emboldened the White House and created splits among Fed officials.

A CBO report projects the Trump budget package would have minimal positive effect on GDP growth (0.04 percentage point), while adding $441 billion to federal budget deficits over the next decade.

In the Fed’s latest Beige Book survey, “all districts reported elevated levels of economic and policy uncertainty, which have led to hesitancy and a cautious approach to business and household decisions.”

While U.S. GDP fell slightly to start the year, other nations’ economies were growing.

Q1’s 2.9% decrease in profits follows a 5.4% increase in Q4/2024.

However, revised government numbers for Q1 indicate stronger business investment and a greater accumulation of inventories than initially reported.

“China has too much leverage over the U.S. for the U.S. to continue with its hardline stance. ... What we need to keep in mind is leverage and who has that leverage.”

For three months, U.S. imports from China will face a 30% tariff, while U.S. exports to China will bear a 10% levy.