The U.S. economy is currently in flux, with the outlook for the next few months heavily influenced by the impact of tariffs, which contributed to a gross domestic product (GDP) decline of 0.3% in the first quarter. While the Consumer Price Index (CPI) remained steady through April, tariffs and uncertainty around long-term U.S. policy are increasingly seen as threats that could drive up consumer prices. Many companies — including Walmart and Ford — have already indicated that price increases are coming.
Consumer sentiment remains at historic lows, reaching its lowest point since June 2022 — even lower than during the economic turmoil of the Great Recession and the COVID-19 pandemic. Despite positive trends in retail sales and employment, uncertainty and tariffs remain dominant themes across economic sectors.
The Federal Reserve is expected to proceed cautiously with monetary policy, focusing on incoming data to guide decisions. This uncertainty has led many major companies to withdraw their financial guidance for 2025, highlighting the difficulty in forecasting future performance amid volatile trade policies.
The next few months will be crucial in determining whether the economy can stabilize and grow or continue to face challenges for the remainder of 2025.
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