Economic Unrest: U.S. Consumer Sentiment Hits New Low Amid Tariff Turmoil

U.S. consumer sentiment plummeted to a 2-1/2-year low as inflation fears grew, driven by President Trump's tariffs, sparking a trade war. The University of Michigan reported that these developments have affected consumer confidence, complicating the Federal Reserve's policy strategies amidst further economic uncertainties.

U.S. consumer sentiment has dropped to its lowest in nearly two and a half years amidst surging inflation expectations due to President Donald Trump's tariffs. The University of Michigan's latest report highlights significant anxiety across political lines, with mounting fears about price hikes potentially undermining the economy.

Echoing business surveys, the uncertainty of Trump's fluctuating tariffs heightens risks to economic growth. Inflation expectations, now comparable to 1993 levels, pose a dilemma for Federal Reserve policymakers. Critics like FWDBONDS' Christopher Rupkey assert that while Washington defends tariffs, consumers foresee detrimental price surges.

The Consumer Sentiment Index plunged to 57.9 this March, erasing post-election gains. Analysts suggest sentiment declines could hinder consumer spending, as reflected in the latest Reuters/Ipsos poll showing discontent with economic policies. The economic landscape remains precarious as markets, interest rates, and spending habits fluctuate.

(With inputs from agencies.)