Despite the chest-thumping from the Trump administration, the Federal Reserve is pointing to the uncertainty and chaos of Trump’s economic policies as a reason for holding interest rates steady.
In a statement, the Federal Reserve determined, “uncertainty about the economic outlook remains elevated,” and that “inflation remains somewhat elevated,” while U.S. Department of Commerce data showed the Trump economy is hammering American families and businesses.
New data released today highlight a decline in business investment, subdued consumer spending due to rising prices, and a significant drop in imports compared to first-quarter data.
Taken together, the data suggest the trade chaos of Trumpinomics is distorting the overall view of an economy that would be growing at just above one percent without the noise of Trump’s chaotic tariff policies.
“The real story of the Trump economy is that it is failing American families who are tightening their budgets and working harder than ever before to keep up with rising prices, stagnant wages, and shrinking opportunities,” said American Bridge 21st Century spokesperson Brandon Weathersby. “But of course, Trump and his billionaire friends don’t care about the reality of American households since the economy is working for them. They can afford higher prices, and they’ve gotten massive tax breaks signed into law by Trump. Everyone else is on their own.”
In June, inflation rose to 2.7%, above the Federal Reserve’s target of 2%. The latest jobs report showed payrolls increased by the smallest number since October 2024. The report showed the manufacturing industry lost 7,000 jobs, the wholesale trade industry lost 6,600 positions, while professional and business services payrolls decreased by 7,000 jobs.
In June, overall new housing starts fell by nearly 10% the month prior. In the same month, new home sales dropped by 13.7%, the biggest monthly decline since 2022.
On a year-over-year basis, discretionary spending on services is down, a signal that households are tightening their budgets. Economists at Wells Fargo warned that in more than 60 years, there has never been a recession without discretionary spending falling on a year-over-year basis.
Published: Jul 30, 2025