GD POLITICS WTF Is Up With The Economy?
May 19, 2025
Neil Irwin, Chief Economic Correspondent at Axios and author of "The Alchemists," navigates the chaotic economic landscape post-pandemic. He discusses the unpredictable nature of economic forecasts and the ramifications of fluctuating tariffs on inflation. The conversation dives into the Federal Reserve's interest rate strategies and the implications of recent U.S. credit rating downgrades. Irwin challenges traditional recession definitions, advocating for a broader understanding of economic stability amidst rising political tensions and evolving policies in Washington.
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Mixed Signals in Economic Data
- Major economic indicators like unemployment and job growth look good despite negative Q1 GDP.
- Weaker survey data and inflation expectations may hint at future softness not yet reflected in headline data.
Political Polarization Skews Sentiment
- Economic sentiment swings sharply with partisan affiliation.
- Survey responses often reflect political views more than actual economic conditions.
Tariffs Cause Economic Uncertainty
- Tariff rates on imports rose from 1.5% to 15-20%, a major structural shift.
- Unpredictable, on-again/off-again tariffs create business uncertainty that can harm the economy beyond direct costs.
