Moneywise

Tue, Jun 3, 2025, 4:11 AM5 min read

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With talk of trade wars, fear of stagflation and slashes to Social Security staffing, you might be justifiably concerned about your retirement savings — especially if you’re one of thousands of federal workers now without a job.

“The level of tariff increases announced so far is significantly larger than anticipated, and the same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Jerome Powell, the chair of the Federal Reserve, said at the Economic Club of Chicago in April 2025.

“Both survey and market-based measures of near-term inflation expectations have moved up significantly, with survey participants pointing to tariffs.”

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Powell isn’t alone in his concern. Almost nine-in-ten (89%) of U.S. adults anticipate price increases as a result of President Donald Trump’s tariff policy, according to a new Gallup poll. What’s more, the Federal Open Market Committee (FOMC) — the policy-making wing of the Federal Reserve System — is also concerned about the short-term effects of Trump’s economic policies.

Thanks to Trump’s aggressive economic policies, there’s now fear of stagflation — simultaneous slow economic growth and elevated inflation — hitting the U.S. economy.

“The Federal Reserve’s projections confirm what millions of Americans are already thinking: President Trump is steering our economy toward disaster,” said Alex Jacquez, chief of policy and advocacy at non-profit think tank Groundwork Collaborative, in response to the latest Fed projections.

American optimism about their financial prospects fell for the fourth straight month in April, according to the University of Michigan’s Consumer Sentiment Report. Consumer expectations — gauging American attitudes towards the future — have tumbled by 32% since January, in the steepest three-month decline since the 1990 recession.

Combined, these bleak figures suggest Americans believe things won’t get better any time soon.

“Launching chaotic trade wars with our allies and gutting Social Security, Medicaid and other vital programs in order to fund tax breaks for his billionaire donors isn’t making life more affordable for working-class families,” Jacquez said.