Experts are raising concerns about the potential for a recession due to Trump’s trade policies. Alex Jacquez from the Groundwork Collaborative pointed to recent Federal Reserve comments that show growing risks for U.S. businesses.
Jacquez explained that the Federal Open Market Committee’s (FOMC) latest statement signals a “perfect storm for a recession brewing” under Trump’s trade policies. He warned that U.S. businesses are already feeling the effects of inflation and slowing growth. “Working families and businesses are already suffering from high inflation and slower growth,” Jacquez said. “Trump’s trade policies are putting many companies at risk.”
The FOMC recently revealed concerns about rising inflation and unemployment. As a result, the committee decided to keep the federal funds rate at 4.25-4.5%. They have kept this rate for the last three meetings. It follows a series of cuts last year. These actions leave many businesses uncertain about future strategies.
In addition to the Fed’s actions, Trump’s trade policies remain central to the economic outlook. Fed Chair Jerome Powell warned that sustained tariffs could lead to higher inflation, slower growth, and increased unemployment. “If tariffs remain in place, they could hurt the economy,” Powell said.
Small businesses are feeling the impact of Trump’s trade policies. Former Labor Secretary Robert Reich highlighted that tariffs on goods like baby supplies and cleaning products are raising prices. “Tariffs hurt small businesses most,” Reich explained. Small businesses, which account for 80% of U.S. employment, face the most pressure. These companies may have to lay off workers to survive higher costs.
The ongoing trade tensions and inflation could force businesses to rethink their strategies. Many will face tough decisions, including raising prices or reducing staff. The future of small businesses depends on how they adjust.
As inflation and tariffs continue to rise, businesses will need to adapt. If they can’t, they risk facing significant losses. The public will also need to recognize the impact of Trump’s trade policies. If they do, it could affect voter sentiment in the 2026 midterm elections.
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