Welcome To The ‘Uncertainty’ Economy | Global News Avenue

Competition by President Donald Trump, the trade war threatens to make businesses and consumers uneasy about the future, uncertainty itself could damage the economy.

President Donald Trump sparked chaos in financial markets this week Issued huge tariffs On Tuesday, against Canada, Mexico and China and doubled Threat to impose more tariffs The next day, facing other countries. Commerce Secretary Howard Lutnick said import taxes on certain sectors could be mitigated, leaving policymakers to guess what U.S. trade policy will be in the coming weeks and months.

In policy whipping, the word “uncertainty” appears everywhere—in revenue calls, economic commentary, and surveys on business and consumer sentiment. Economists warn that the potential negative effects of tariffs include increasing the cost of living and slowing down the economy. However, uncertainty itself can bring costs regardless of its actual impact.

“Uncertainty” abounds

Of course, business leaders and consumers will never be completely sure of the future. But when leaders are unsure what the rules will be in the near future, they may delay hiring and investment decisions.

Several economic papers show that uncertainty is related to lower investment, reduced employment and more volatility in financial markets. Uncertainty has masked the measure of consumer confidence. raised concerns about economic downturn Brewing.

The beige book is based on feedback from business and civic leaders across the country and is a Fed report on the state of the economy. The term “uncertainty” has appeared 47 times in the latest version released on Wednesday, compared with 17 in the previous report released in January.

“American Bank of America economists believe that Trump 2.0 has caused significant uncertainty about the economic landscape driven by geopolitical developments such as tariff threats, transfer trade negotiations, immigration policies, record fiscal deficits, and Russia-Ukraine peace negotiations,” the US economist wrote in a comment.

Another example: The term “uncertainty” appeared five times in the Institute for Supply Management’s survey of the service industry in February.

“The business seems to be popular after the election, but the uncertainty after the election seems to have reduced the sales and the uncertainty is increasing again,” the manager of the professional, scientific and technical services department told ISM.

The survey shows that the service sector has expanded at a healthy pace, but discussions on uncertainty have raised some dangers for economists.

“Worrying that the economy won’t be misplaced, as the uncertainty of the spikes can choke commercial investment in the equipment structure and potentially undermine hiring,” Ryan Sweet, chief economist at Oxford Economics, said in a comment. “Consumers are not immune to uncertainty because it can lead them to go off the market.”