Democrats’ Tariff Panic Sends Inflation Expectations Soaring, Consumer Sentiment PlungingJohn Carney 21 Feb 2025
Consumer sentiment took a sharp hit in February as Democrats and independents reacted negatively to Trump’s tariff policies, fearing they will drive prices higher. Republicans remained largely unmoved, highlighting a deepening divide in economic perceptions.
The University of Michigan’s index plummeted nearly 10 percent to 64.7, with long-term inflation expectations climbing to 3.5 percent—the highest since 1995—and short-term expectations jumping to 4.3 percent. The most significant shifts came from Democrats and independents, who increasingly expect tariffs to fuel price hikes. Republican expectations, by contrast, remained steady.
The consumer sentiment index for Democrats has fallen sharply, dropping from 91.4 in October to 51.3 in February. Much of this has been driven by the expectations gauge, which has fallen from 93.1 in October to 36.8 in February.
Among Republicans, sentiment has climbed from 53.6 in October to 86.7 in February and January. The expectations measure has soared from 61.4 to 106.6.
The media’s relentless framing of tariffs as inflationary has likely exacerbated these fears. News coverage has consistently claimed that tariffs are likely to lead to price hikes, despite uncertainty over the actual economic impact. Inflation did not rise when Trump imposed tariffs in his first term.
While tariffs can raise costs of some goods, they aren’t typically inflationary in a broad sense. Factors like currency shifts and supply chain adjustments complicate the picture. Often, the cost of a tariff is born by merchants rather than passed on to customers. Yet, the inflation narrative has cemented itself among Democratic and some independent consumers, fueling expectations of higher prices.
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https://www.breitbart.com/economy/2025/02/21/democrats-tariff-panic-sends-inflation-expectations-soaring-consumer-sentiment-plunging/
