In a stark economic forecast, the Federal Reserve projects aggressive stagflation for the remainder of 2025, anticipating 3 percent inflation, a 1.4 percent GDP decline, and 4.5 percent unemployment. This projection follows the Trump administration’s consideration of increased aid to Israel and the passage of the “One Big Beautiful Bill Act,” which significantly increases the national deficit. Fed Chair Powell reiterated that the current economic downturn stems directly from President Trump’s tariffs. The Fed maintains its current interest rate policy despite the projected stagflation.
Read More
US retail sales have plummeted, marking the largest drop in four months. This significant decline reflects a widespread shift in consumer behavior, driven by a confluence of factors impacting the financial well-being of many Americans. The most immediate and palpable reason is the simple lack of disposable income. With the rising costs of essential goods like food, rent, and medical care, many are finding it increasingly difficult to afford even basic necessities, let alone discretionary purchases. This financial strain is leading individuals to drastically curtail their spending, prioritizing essential expenses and delaying or foregoing non-essential items altogether.
This reduction in consumer spending is visible across various sectors.… Continue reading
Unemployment benefit claims increased to an eight-month high of 247,000 last week, exceeding analysts’ predictions and raising concerns about the economy’s future. This rise, though still historically low, follows a trend of decreased consumer and business confidence, potentially linked to ongoing tariff uncertainty. The job market shows signs of cooling, with fewer job openings and a decrease in employee resignations, suggesting a slowdown in the previously robust hiring environment. Analysts anticipate modest job growth in May’s official employment report, further indicating a potential economic shift.
Read More
In a recent interview, President Trump downplayed the impact of tariffs on consumer goods, claiming that increased prices on items like strollers and clothing are insignificant compared to energy costs. He defended the tariffs, arguing they address a massive trade deficit with China and asserting that consumers don’t need excessive quantities of goods. Despite a positive jobs report, concerns remain about the economic impact of the tariffs and a potential recession, with Trump attributing negative aspects to the Biden administration. Furthermore, the administration is facing pressure regarding the deportation of Kilmar Abrego Garcia, with conflicting legal opinions on his return.
Read More
Berkshire Hathaway’s first-quarter operating earnings decreased 14% to $9.64 billion, primarily due to a 48.6% drop in insurance-underwriting profit, partially attributed to Southern California wildfires. The decline also reflects a $713 million foreign exchange loss, contrasting with a gain the previous year. Tariffs and geopolitical uncertainties, particularly impacting BNSF Railway and Geico, created an unpredictable environment and contributed to the decrease. Despite this, Berkshire’s cash reserves reached a record high of over $347 billion.
Read More
Canada’s real GDP fell 0.2 per cent in February, primarily due to a 0.6 per cent decline in goods-producing industries, particularly mining and oil and gas extraction. While service-producing industries also contracted slightly, the manufacturing and finance sectors showed growth. However, early March data suggests a 0.1 per cent GDP increase, pointing towards a moderate 1.5 per cent annualized growth rate for the first quarter. Experts attribute February’s decline largely to severe winter weather, but anticipate potential economic headwinds from the ongoing US-China trade war in the second quarter.
Read More
The U.S. economy contracted by 0.3 percent in the first quarter of 2025, marking its first decline in three years. This unexpected shrinkage, attributed to increased imports fueled by anticipated tariffs, sent markets sharply lower. Former President Trump blamed President Biden, claiming the downturn is a result of Biden’s economic policies and not his own anticipated tariffs. However, the weak economic performance, coupled with disappointing job growth numbers, presents a significant political challenge for Trump. Further economic data is expected on May 6th.
Read More
U.S. GDP unexpectedly shrank by 0.3% in the first quarter of 2025, significantly below forecasts, primarily due to businesses front-loading imports in anticipation of President Trump’s new tariffs. This surge in imports artificially lowered the growth rate, though economists caution that this effect may be temporary. Subsequently, weak job growth numbers further fueled recessionary concerns. The Federal Reserve is likely to maintain its current interest rate as a result of these concerning economic indicators.
Read More
President Trump’s second term has seen a sharp decline in his economic approval ratings, with multiple polls showing significant disapproval of his handling of inflation, tariffs, and stock market volatility. A majority of respondents across various surveys believe the economy has worsened under his leadership. His inconsistent trade policies, including recently imposed and then partially suspended tariffs, have injected uncertainty into the market and raised concerns about higher prices and product shortages. This contrasts sharply with his initial success in 2020, which was fueled by economic optimism.
Read More
Following President Trump’s softened stance on the U.S.-China trade war and expression of optimism for a deal, China’s foreign ministry spokesperson stated their willingness to engage in talks. This shift in tone, coupled with comments from U.S. Treasury Secretary Scott Bessent suggesting a de-escalation, positively impacted global markets, which saw significant gains. While Trump maintains high tariffs on Chinese imports, the potential for de-escalation has eased recession fears. Further progress remains dependent on ongoing negotiations and future statements from both sides.
Read More
John Q. Hosedrinker 
Matt Underwood