The US economy is bracing for a tumultuous week as President Donald Trump’s sweeping policy changes continue to unsettle consumers and businesses. Trump’s erratic trade war has already taken a toll on economic growth, with American businesses rushing to stock up on imports. The proposed “big, beautiful” tax bill, expected to dramatically widen the country’s deficit, has also roiled the bond market.
New data releases this week will provide insight into the unfolding fallout of Trump’s policies. Key indicators include two consumer surveys, a revised estimate of economic growth in the first quarter, and fresh figures on consumer spending. Market observers will also closely watch public remarks from several Federal Reserve officials.
Consumer Confidence and Spending
The Conference Board’s consumer survey for May, released on Tuesday, will provide a closely watched measure of people’s attitudes toward the economy. Economists project a slight improvement in consumer confidence after April’s tumble to a reading of 86, the lowest level since May 2020. On Friday, the University of Michigan will release a revised version of its consumer survey for May, which initially showed consumer sentiment sinking to the second-lowest level on record.
Economic Growth and Inflation
The Commerce Department’s second estimate of gross domestic product (GDP) for the first quarter, released on Thursday, will provide further insight into the state of the economy. An initial estimate showed GDP declined at an annualized rate of 0.3% in the first three months of the year. Additionally, April data on household spending, income, and the Fed’s preferred inflation gauge will be released on Friday.
Housing Market and Mortgage Rates
The US housing market faces uncertainty due to persistently elevated mortgage rates, economic concerns, and climbing home prices. New data this week will show if buyers will be squeezed further. S&P Global’s S&P Global CoreLogic Case-Shiller National Home Price Index for March, released on Tuesday, will provide insight into home-price growth. The National Association of Realtors’ pending home sales report for April, released on Thursday, will offer further insight into the housing market.
Federal Reserve’s Response
Market observers will closely watch Fed officials’ public comments and minutes from their latest policy meeting for clues on interest rates. Fed officials have signaled a preference to stand pat, waiting for further clarity on Trump’s policies and the US economy’s response. Notable Fed events this week include remarks from Minneapolis Fed President Neel Kashkari, New York Fed President John Williams, and Chicago Fed President Austan Goolsbee.
As the US economy navigates these uncertain times, the data releases and Fed events this week will provide crucial insight into the impact of Trump’s policies and the potential direction of the economy.