Inflation Concerns Rise as Trump's Trade Policies Fuel Uncertainty
* Consumer sentiment declined in February, reflecting concerns over inflation fueled by uncertainty surrounding Trump's trade policies.
* University of Michigan's Consumer Sentiment Index dropped to 64.7, marking a nearly 10% decline from January.
* One-year inflation expectations surged to 4.3%, the highest since November 2023, driven by fears of rising prices due to tariffs.
* Long-term inflation expectations also climbed to 3.5%, the highest since April 1995, indicating consumer anticipation of continued price increases over the next 5-10 years.
* Expectations for personal finances and the short-term economic outlook also declined, with the long-term economic outlook reaching its lowest since November 2023.
* Trump's recently announced 25% tariffs on steel and aluminum imports, as well as potential tariffs on autos, chips, and pharmaceuticals, have contributed to consumer pessimism.
* However, economists remain cautious, noting that many of Trump's tariff threats have yet to be implemented and the situation remains fluid.
* Federal Reserve officials have expressed concern over the upside risks to inflation, citing potential impacts from trade and immigration policies.