Tag: DonaldTrump

President Donald Trump’s administration unveiled its 2026 budget proposal on Friday, presenting a sweeping reconfiguration of federal spending priorities. The budget reflects the president’s broader vision for his second term, aligning with the direction set in his first 100 days back in office and marked by abrupt terminations of federal personnel.

This proposal includes dramatic reductions, or complete eliminations, of spending in numerous domestic programs. Key targets include child care services, disease research, renewable energy initiatives, and U.S. peacekeeping efforts abroad. Many of these cuts are already in progress under the guidance of Elon Musk’s Department of Government Efficiency. At the same time, the plan boosts funding by billions of dollars for Trump’s high-priority immigration enforcement and mass deportation policies.

Trump’s administration maintains its commitment to ending what it calls “woke programs.” This includes the elimination of preschool grants to states that run diversity programs. It also follows through on Trump’s vow to put an end to what he refers to as the “weaponization of government,” by slashing funding for the Internal Revenue Service, despite criticism that he himself is leveraging government power against perceived adversaries.

Overall, the White House estimates that the proposal reduces domestic spending by $163 billion, or 22.6 percent below current funding levels. In contrast, Trump seeks to inject $375 billion in new funding for the Department of Homeland Security and the Department of Defense. This funding surge is part of what Trump calls his “big, beautiful bill” — a legislative package combining significant tax cuts with major reductions in spending. He insists this is essential to repel what he characterizes as a “foreign invasion,” even as data shows migrant arrivals at historic lows.

House Speaker Mike Johnson praised the plan, describing it as “a bold blueprint that reflects the values of hardworking Americans and the commitment to American strength and prosperity.”

Although presidential budgets are not legally binding, they often serve as guiding documents in the fiscal debates that unfold in Congress. Trump’s 2026 proposal is his first since returning to the White House and offers insight into his second-term ambitions and the broader Republican agenda on Capitol Hill.

The timing of the budget also intersects with Trump’s ongoing imposition of tariffs, which many view as a de facto tax increase. These tariffs, totaling potentially hundreds of billions of dollars, have sparked global trade tensions. Consumers, CEOs, and international leaders alike worry that this trade war could tilt the U.S. economy toward a downturn.

In an interview with NBC News’ “Meet the Press,” Trump rejected claims that a recession was looming. When host Kristen Welker brought up Wall Street analysts’ growing concerns, Trump responded, “Well, you know, you say, some people on Wall Street say. Well, I tell you something else. Some people on Wall Street say that we’re going to have the greatest economy in history.”

Democrats were quick to criticize the budget as harmful to average Americans. Senator Patty Murray of Washington, the top Democrat on the Senate Appropriations Committee, said, “President Trump has made his priorities clear as day: he wants to outright defund programs that help working Americans,” while simultaneously “he shovels massive tax breaks at billionaires like himself and raises taxes on middle-class Americans with his reckless tariffs.”

The budget outline was presented by the White House Office of Management and Budget, led by Russell Vought. A key architect of Project 2025 from the conservative Heritage Foundation, Vought provided only topline figures in a leaner, “skinny” version of the full budget.

It addresses discretionary spending, which currently totals about $1.83 trillion annually across defense and nondefense sectors. Under Trump’s plan, this amount would drop by $163 billion, bringing it down to $1.69 trillion. However, this figure represents only a fraction of the government’s nearly $7 trillion overall budget, which includes mandatory spending programs like Social Security, Medicare, and Medicaid.

In recent years, federal budgets have steadily grown, as have deficits, which now approach $2 trillion annually. Interest payments on the national debt alone are nearing $1 trillion per year, driven in part by emergency COVID-19 spending, tax reforms that cut revenue, and rising costs tied to aging-related health care. The U.S. national debt currently stands at $36 trillion.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, emphasized the need for a comprehensive solution. “We need a budget that tells the full story, and it should control spending, reduce borrowing, bring deficits down,” she said.

Key proposals in the budget include slashing the State Department and international programs by 84 percent, leaving them with just $9.6 billion. This includes drastic reductions to the U.S. Agency for International Development. The Department of Health and Human Services would be cut by $33.3 billion, and the Department of Education would see a $12 billion decrease. Both the Centers for Disease Control and Prevention and the National Institutes of Health face major funding reductions.

Conversely, the Department of Defense would receive an additional $113.3 billion, and the Department of Homeland Security would gain another $42.3 billion, subject to congressional approval of Trump’s broader legislative plan. However, this defense funding boost has not been universally embraced among Republicans.

Senator Mitch McConnell of Kentucky, the former GOP Senate Leader, labeled the defense spending hike a “gimmick.” He added, “America cannot expect our allies to heed calls for greater annual defense spending if we are unwilling to lead by example. Fortunately, Presidential budget requests are just that: requests. Congress will soon have an opportunity to ensure that American power – and the credibility of our commitments – are appropriately resourced.”

The power to determine federal spending lies with Congress, which must pass legislation to fund agencies and programs. That process often breaks down, leading to temporary funding measures to prevent government shutdowns. Lawmakers are currently working on Trump’s “big bill” that pairs tax reductions with massive spending cuts and expanded deportation efforts — unlike the budget blueprint, this package would carry legal authority.

Russell Vought is expected to appear before Congress in the coming weeks to defend the administration’s proposals. A veteran of Trump’s first term, Vought played a significant role in shaping the current vision. He also authored a detailed section in the Heritage Foundation’s Project 2025 outlining a major overhaul of the federal government.

Vought is separately preparing a $9 billion package aimed at defunding both the U.S. Agency for International Development and the Corporation for Public Broadcasting, which includes PBS and NPR. Late Thursday, Trump signed an executive order instructing the Corporation for Public Broadcasting and other agencies to halt funding for public media.

Vought has indicated that this $9 billion proposal would be only the first in a series of so-called “budget rescissions.” These measures are designed to test how willing lawmakers are to go on record supporting significant funding rollbacks.

Many Americans may only now begin to experience the tangible impact of President Donald Trump’s broad tariff policies. That’s because a key shipping exemption known as the de minimis rule officially expired just after midnight on Friday. This rule had previously allowed goods valued at $800 or less to enter the United States without tariffs, bypassing many inspections and bureaucratic procedures.

The de minimis loophole was pivotal in transforming American shopping habits. It enabled Chinese online retailers such as Shein, Temu, and AliExpress to deliver a wide range of ultra-affordable products—from craft supplies and patio décor to clothing and camera gear—directly into American homes. With its removal, baseline tariffs as steep as 145% are now being imposed on Chinese imports, which could more than double the cost of items that bargain-hunting consumers have come to rely on.

This development is reverberating across social media platforms, where consumers are reacting with alarm. For the first time, abstract trade policy is being translated into something consumers can physically see: a higher receipt at checkout.

Shipping giants including UPS, FedEx, DHL, and the U.S. Postal Service report they are ready to handle the change. A spokesperson from U.S. Customs and Border Protection (CBP) affirmed to CNN, “We are prepared and equipped to carry out enhanced package screenings and enforce orders effectively.”

However, whether the average American consumer is truly prepared for these changes is another story.

Earlier this year, when Trump first curtailed the de minimis exemption for shipments originating from Hong Kong and China, the consequences were immediate and disruptive. The U.S. Postal Service briefly halted parcel deliveries from China, and packages that were shipped experienced substantial delays with little to no tracking available domestically.

At the core of the disruption is the sheer volume of affected shipments. A congressional research report found that over 80% of all U.S. e-commerce shipments in 2022 were classified as de minimis imports, most of which came from China. According to CBP, the agency processes nearly 4 million of these duty-free shipments daily, and the total number of such packages in the last fiscal year reached 1.36 billion.

This enormous volume includes everything from dog accessories and kids’ bead kits to kitchen tools and trinkets. Regular users of platforms like Temu and Shein told CNN that these sites have become increasingly popular as American-made products grow less affordable.

“I can’t afford to buy from Temu now, and I already couldn’t afford to buy in this country,” said Rena Scott, a 64-year-old retired nurse from Virginia, in a comment to CNN Business.

The new policy is likely to hit lower-income households the hardest. Research from economists at UCLA and Yale in February revealed that 48% of de minimis shipments were delivered to the poorest zip codes in the U.S., while only 22% went to the wealthiest areas.

This shift might not be instantaneous but is expected to unfold gradually. Even before the exemption officially expired, retailers like Shein and Temu began adjusting their prices. CNN monitored these hikes in real time.

Shein addressed the change directly in a public notice, stating, “Due to recent changes in global trade rules and tariffs, our operating expenses have gone up. To keep offering the products you love without compromising on quality, we will be making price adjustments. We’re doing everything we can to keep prices low and minimize the impact on you.”

Temu, meanwhile, is adapting its operational model. A spokesperson told CNN that the platform is increasingly relying on domestic fulfillment and expanding its network of U.S.-based sellers. “Temu’s pricing for U.S. consumers remains unchanged as the platform transitions to a local fulfillment model,” the company said. “All sales in the U.S. are now handled by locally based sellers, with orders fulfilled from within the country.”

It remains uncertain whether further price hikes will occur among these or other online retailers.

Shipping companies are also adjusting to the change. DHL confirmed to CNN that it has “increased our staffing levels in order to support the additional volume of informal entry clearances we anticipate.”

Meanwhile, the tariff changes themselves are significant. Goods from China and Hong Kong transported by major couriers such as UPS, DHL, and FedEx are now subject to a baseline 145% tariff, in addition to specific duties based on the type of product. Items arriving via USPS face a 120% base tariff or a $100 flat fee per item. That flat fee will rise to $200 beginning June 1.

While core supporters of Trump’s “Make America Great Again” movement continue to stand by him, suggesting in social media posts and interviews that they are willing to weather short-term economic hardship, broader public sentiment is shifting.

A CNN poll conducted by SSRS last month found that 59% of Americans believe Trump’s policies have worsened the U.S. economy. The survey, held between April 17 and 24, came shortly after the White House introduced a series of expansive new tariffs on numerous countries, only to then pause several of them. Nevertheless, 60% of respondents felt Trump’s policies have led to a higher cost of living in their communities.

Now, with the end of the de minimis exemption, those cost increases could become even more noticeable.

At a Cabinet meeting on Thursday, Trump emphasized the significance of the move. “It’s a very, it’s a big deal,” he said. Describing the de minimis rule, he added, “a big scam.” He concluded with, “And we’ve ended, we put an end to it.”

With a stroke of policy, everyday consumers may now find themselves paying more for items they once bought at rock-bottom prices. What was once a behind-the-scenes matter of international trade rules has now become a kitchen table issue for millions of Americans, many of whom are confronting it for the first time not in headlines, but on their receipts.

On Monday, Representative Shri Thanedar, a Democrat from Michigan, publicly announced that he had filed articles of impeachment against President Donald Trump. Thanedar’s move marks a significant step in the ongoing political battle over Trump’s actions during his presidency, despite the apparent lack of support for the measure in the Republican-controlled House of Representatives.

“I have introduced articles of impeachment against President Trump,” Thanedar declared in his online announcement. “When Trump ignores the Constitution, Congress, and the courts, he is not ‘fighting for America.’ He is tearing it down and endangering our democracy.”

Thanedar cited a range of grievances in his seven articles of impeachment, focusing on specific actions by Trump that the congressman deemed abusive of his power. Among the issues raised by Thanedar was the deportation of Kilmar Abrego Garcia, a man who was mistakenly sent to El Salvador, and the actions of the Department of Government Efficiency (DOGE) in cutting funding without congressional approval.

Though the filing of the articles has made waves within Democratic circles, the likelihood of these articles advancing in the current political climate appears slim. In the Republican-majority House of Representatives, support from GOP members would be required for a vote on impeachment. Similarly, even if the House were to vote to impeach, a two-thirds majority in the Republican-controlled Senate would be necessary to convict the president. With Republicans maintaining significant control in both chambers, the articles of impeachment are expected to go nowhere.

However, the introduction of the articles is indicative of the deep frustration many Democrats feel with the president, particularly over a variety of issues that have sparked ongoing controversy.

“Donald Trump has already done real damage to our democracy, but defying a unanimous 9-0 Supreme Court ruling, that has to be the one final straw,” Thanedar said, referring specifically to a Supreme Court decision related to the Abrego Garcia case. “It’s time we impeach Donald J. Trump,” he added emphatically, signaling his belief that this final act of defiance represented a threshold moment for impeachment.

Thanedar also highlighted what he considered to be other impeachable offenses by the president, including his aggressive tariff agenda, which he argued had a damaging impact on global markets. He also referenced Trump’s treatment of the press and concerns about the First Amendment, as well as what he described as the president’s involvement in bribery and corruption within the justice system. In addition, Thanedar expressed concern over Trump’s handling of Americans’ personal data, which he framed as yet another abuse of presidential power.

One of the most significant elements of Thanedar’s argument for impeachment was his accusation of “tyrannical overreach” by the president. “Article seven, tyrannical overreach,” Thanedar said. “Finally, and most importantly, he is attempting to consolidate unchecked power and erode the constitutional limits of the presidency.” This statement underscores Thanedar’s broader concern that Trump’s actions represented a threat to the very foundation of the U.S. political system.

Thanedar’s comments regarding Trump’s power were particularly pointed. “In this country, we have presidents, not kings. That’s not just misconduct. It’s impeachable misconduct,” Thanedar declared, adding that the president’s attempts to undermine constitutional checks and balances were clear grounds for impeachment. His words reflect a deep anxiety among some Democrats that Trump’s behavior threatens the balance of power that the Constitution seeks to maintain between the executive, legislative, and judicial branches of government.

Democratic concerns over Trump’s intentions have only grown more intense in recent months, especially in light of the president’s suggestion that he might seek a third term in office. This concern was amplified when the Trump Organization began selling “Trump 2028” hats on its official website, further fueling speculation about the possibility of a third presidential run. The idea that Trump might attempt to remain in power beyond his constitutionally-mandated two terms has been a source of significant alarm within Democratic circles.

“If we let this stand, we are saying the president is above the law. That the United States Constitution is optional,” Thanedar argued, emphasizing that such a development would set a dangerous precedent for the future of American democracy. He made it clear that he would not remain silent on the issue, calling on his fellow lawmakers—Democrats, Republicans, and independents alike—to join him in standing up against what he views as the erosion of constitutional safeguards.

Thanedar’s call for unity and action was resolute. “I won’t be silent and I’m calling on all my colleagues, Democrats, Republicans, and independents, to stand up with me,” he stated, underscoring his belief that the nation’s political leaders must put aside partisan differences in order to protect the integrity of the Constitution.

In his final remarks, Thanedar delivered a forceful conclusion to his announcement. “Enough is enough. Donald J. Trump must be impeached,” he said, signaling that he intends to continue pushing for accountability and standing firm in his position despite the considerable political obstacles ahead.

The introduction of impeachment articles by Thanedar is likely to remain a contentious issue within the political landscape, particularly as the nation heads toward the 2024 election cycle. While it seems unlikely that these articles will gain the traction necessary to result in Trump’s removal from office, they reflect the broader dissatisfaction and anger that many Democrats continue to feel toward the president and his actions during his time in office. For Thanedar, the impeachment effort represents not just a call for accountability but a desperate attempt to preserve the constitutional values he believes are under siege.

As the situation unfolds, the future of these articles will largely depend on the political dynamics within Congress and whether enough bipartisan support can be garnered for such an effort. For now, Thanedar’s impeachment move stands as a symbolic gesture in the ongoing debate over Trump’s legacy and the health of American democracy.

The White House has initiated a quiet search for a potential replacement for Defense Secretary Pete Hegseth, according to a U.S. official familiar with the matter who was not authorized to speak publicly. This development comes in the wake of another controversy involving Hegseth, who is once again under scrutiny for allegedly leaking sensitive military information in a group chat.

According to the source, Hegseth disclosed classified details in a private group conversation using the Signal messaging app on his personal phone. The recipients of this information reportedly included his wife, brother, and legal counsel. The content of the chat allegedly included minute-by-minute updates on U.S. airstrikes targeting Houthi positions in Yemen. This incident is said to have occurred in March, around the same time that Hegseth relayed similar classified information to senior officials at the White House through another Signal group. That group inadvertently included a journalist.

The premature disclosure of strike information could have placed American pilots in harm’s way had it been intercepted by enemy forces. Already, Houthi militants have successfully downed two U.S. Predator drones, raising concerns about potential lapses in operational security.

Despite the allegations, White House Press Secretary Karoline Leavitt denied any effort to replace Hegseth. In a statement posted on X, she declared, “President Trump stands strongly behind him.” President Trump echoed this sentiment during a press interaction at the White House, dismissing the controversy as overblown. “He’s doing a great job — ask the Houthis how he’s doing,” the president remarked.

Hegseth also pushed back against the allegations during a White House Easter event held earlier in the day. “This is what the media does, they take anonymous sources from disgruntled former employees, and then they try to slash and burn people, ruin their reputation. It’s not going to work with me,” Hegseth said in his defense.

The defense secretary’s comments appear to reference the abrupt exits of four high-ranking Pentagon advisers last week. One of them, former Defense Department spokesperson John Ullyot, resigned and subsequently published a strongly-worded opinion article describing recent events at the Pentagon as a “full-blown meltdown” marked by internal disputes that, according to him, are undermining President Trump’s administration.

Three other Pentagon officials—Dan Caldwell, Colin Carroll, and Darin Selnick—were also removed from their positions and escorted out of the building. These individuals were accused of leaking information to the media, although they have denied any wrongdoing. The trio issued a joint statement on X labeling their removal as “unconscionable” and emphasizing that they had not been informed about the specific nature of the alleged leaks.

“All three of us served our country honorably in uniform — for two of us, this included deployments to the wars in Iraq and Afghanistan. And, based on our collective service, we understand the importance of information security and worked every day to protect it,” they wrote in their statement.

Caldwell and Selnick, in particular, have long-standing professional ties with Hegseth, having collaborated with him at Concerned Veterans for America, a conservative advocacy group that has influenced veterans’ policy in recent years.

The unfolding drama has not gone unnoticed by lawmakers. Senator Jeanne Shaheen of New Hampshire, a Democrat and a member of the Senate Armed Services Committee, criticized Hegseth’s actions and pointed to the larger issue of his qualifications for the job. “But we must not forget that ultimate responsibility here lies with President Trump for selecting a former weekend TV host, without any experience successfully leading a large and complex organization, to run our government’s biggest department and make life and death decisions for our military and country,” she stated.

While the White House maintains public support for Hegseth, the internal deliberations about his future suggest a growing concern over the implications of his actions. The fact that the leak could have compromised national security has escalated the urgency of the situation, particularly as tensions continue to rise in the Middle East and the U.S. military maintains a delicate operational presence in the region.

The controversy has also shed light on the potential security vulnerabilities that arise from using personal devices and encrypted messaging apps for sensitive communications. The Signal app, while popular for its end-to-end encryption, is not authorized for the transmission of classified material by U.S. government officials. The revelation that Hegseth may have used it to share top-secret operational data with non-government individuals raises serious questions about protocol adherence and information governance at the highest levels of national defense.

The March leak incident is particularly alarming because of its proximity to real-time operations. Intelligence and defense analysts worry that such breaches, if exploited by foreign actors, could jeopardize not only the safety of military personnel but also the success of U.S. missions abroad. Given that adversaries such as the Houthis have already demonstrated their ability to down advanced American drones, any additional vulnerabilities could be catastrophic.

Although the administration has made no official announcements regarding a search for a new defense secretary, the internal discussions suggest that the controversy surrounding Hegseth has reached a critical point. The situation could develop further depending on whether more details emerge about the extent and impact of the leaks, and whether Congress or the intelligence community demands a formal investigation.

As the Pentagon reels from internal discord and high-level departures, questions remain about morale within the department and the future direction of U.S. military leadership. If more officials continue to speak out, or if further security lapses come to light, the administration could be forced to re-evaluate its stance on Hegseth despite the president’s current support.

In the meantime, the defense secretary remains defiant, attributing the backlash to politically motivated leaks and disgruntled former colleagues. Whether that narrative will hold up under increasing scrutiny is yet to be seen. The situation underscores the complex and high-stakes nature of leadership at the Pentagon, especially during a time of global instability and growing threats.

For now, Hegseth remains in his position, bolstered by public endorsements from President Trump and the White House. However, the growing controversy surrounding his handling of classified information has sparked concerns that may ultimately determine his political and professional future.

U.S. financial markets were rocked once again as President Donald Trump escalated his public criticism of Federal Reserve Chair Jerome Powell, branding him “a major loser” over the central bank’s decision not to cut interest rates. The president demanded that Powell take immediate action to lower borrowing costs in a bid to stimulate the American economy.

Using social media as his platform, Trump urged Powell to slash interest rates “pre-emptively,” accusing the Fed chair of being too slow to react to the evolving economic landscape. “There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” the president declared in his online post.

Trump’s latest remarks come amid growing concern that his own economic policies—particularly aggressive tariffs—have contributed to market instability and increased the risk of a recession. His ongoing feud with Powell, whom he appointed during his first term in office, has only deepened the market unease.

As a result of the heightened tensions and economic anxiety, U.S. stock indexes suffered steep losses. The S&P 500, a barometer of 500 of America’s most significant companies, dropped by approximately 2.4% on Monday. Since the beginning of the year, the index has declined by around 12%. The Dow Jones Industrial Average mirrored that performance, also falling 2.4% and registering a year-to-date loss of roughly 10%. Meanwhile, the tech-heavy Nasdaq fared even worse, shedding more than 2.5% and posting a staggering 18% decline since January.

The market jitters weren’t confined to the U.S. On Tuesday, trading remained subdued in most Asia-Pacific markets. Japan’s Nikkei 225 closed slightly lower by about 0.1%, and Australia’s ASX 200 declined by roughly 0.3%. In contrast, Hong Kong’s Hang Seng Index managed a modest gain of about 0.3%.

European markets also reflected the global unease. In early trading, the UK’s FTSE 100 edged down by about 0.05%, while Germany’s DAX index fell by 0.5%. France’s CAC 40 registered a more pronounced drop of 0.6%.

Ordinarily, the U.S. dollar and government bonds are viewed as safe havens during market turmoil. However, even these assets have come under pressure. The dollar index, which gauges the greenback’s strength against a basket of currencies including the euro, fell on Monday to its lowest point since 2022.

In another sign of market unrest, yields on U.S. government bonds climbed on Tuesday, indicating that investors are demanding higher returns to hold onto Treasuries. This trend reflects a lack of confidence in the near-term stability of the U.S. economy.

At the same time, gold prices soared to a record high, breaching the $3,500 per ounce threshold. The surge in the precious metal’s value signals investors’ preference for assets deemed more secure amid uncertain times. Gold is traditionally seen as a safe haven when economic conditions become volatile.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, pointed to multiple global factors boosting gold’s appeal. “No long-term resolution [is] in sight for conflicts around the world, particularly in Ukraine and Gaza,” she noted. “There are also concerns about the risk that geo-political tensions escalate as opportunities in the Arctic are eyed by the US and Russia,” she added.

Meanwhile, tensions are not just limited to economic policies and markets. On the global diplomatic front, China has issued a warning to other nations, urging them not to “appease” the U.S. in trade negotiations. The comments come amid increasing skepticism of American leadership in global economic matters.

Despite the heightened uncertainty, the International Monetary Fund (IMF) recently stated that a global recession remains unlikely, even with the pressures stemming from U.S. tariffs. However, the IMF also warned that its upcoming country-by-country growth forecasts would include “notable markdowns.”

President Trump’s criticisms of Powell are not new. Throughout his first term, he repeatedly expressed dissatisfaction with Powell’s approach to interest rates and even reportedly considered firing him. Following his return to office, Trump has continued to pressure Powell to cut borrowing costs.

This latest attack followed Powell’s remarks cautioning that Trump’s tariff policies could contribute to inflation and impede economic growth. Trump ramped up his criticism last Thursday by publicly calling for Powell’s removal. “Powell’s termination cannot come fast enough,” he wrote on social media.

The idea of dismissing the Fed chair is controversial and could face significant legal hurdles. The Federal Reserve has traditionally operated with a high degree of independence to insulate it from short-term political influence. Powell has previously told reporters that he does not believe the president possesses the legal authority to fire him.

Still, the Trump administration appears to be exploring options. One of Trump’s top economic advisers confirmed that discussions about removing Powell were underway, noting this on Friday—a day when the U.S. stock market was closed.

These developments coincide with the spring meetings of the International Monetary Fund and the World Bank, where top financial policymakers have gathered in Washington. The heightened political pressure on the Fed has become a central topic of concern at the gatherings.

Christopher Meissner, an economics professor at the University of California, Davis, and a former IMF employee, explained to the BBC’s Today programme that political interference in central banking was more common in the past. “However, the past 30 or 40 years what we’ve learned is that central bank independence is the key to financial stability and low inflation. And I think this is a major reversal and we have to watch out for it,” he warned.

Streeter echoed this view, emphasizing the importance of insulating monetary policymakers from political influence. “The independence of central banks is seen as critical to ensure long-term price stability, ringfencing policymakers from short-term political pressures,” she said.

Looking ahead, the IMF will release its latest economic projections shortly. These forecasts are expected to reflect growing concerns about U.S. economic performance and its potential ripple effects worldwide. “They used to say ‘When the US sneezed, the rest of the world caught a cold’. It’ll be really curious to see if that continues,” said Meissner. “However, I think people are expecting a pretty significant downturn in the US in the coming months… and that can’t be good for the rest of the world.”

Streeter noted that Trump’s policy decisions have undermined the global perception of the U.S. as a stable economic leader. “Yields on 10-year US Treasuries have held onto their recent rise above 4.4%. It’s another sign of unease about the direction of the US economy, amid worries that policies playing out could keep inflation higher and slow growth, and flags the anxiety rattling through the markets right now,” she said.

Goldman Sachs has taken a significantly more negative stance on the U.S. economy and stock market due to President Donald Trump’s tariff policies. The firm now joins a growing number of economists warning that the ongoing trade war could push the U.S. into a recession and cause further trouble for stock market investors.

Goldman Sachs economists, led by Ronnie Walker, have adjusted their forecast to anticipate a 15% average tariff rate on all goods this year. This revision came in a Sunday note to clients and reflects Trump’s latest aggressive stance ahead of his scheduled “Liberation Day” tariff announcement on Wednesday. The president has indicated that he intends to impose even steeper tariffs than originally planned.

As a result, Goldman’s economic outlook has become more bearish. The firm has raised its probability of a U.S. recession within the next year from 20% to 35%. Additionally, Goldman economists have revised several key projections. Their end-of-2025 inflation estimate has been increased to 3.5%, up from 2.8% just last month. Their unemployment forecast now stands at 4.5%, which would be the highest since October 2021. Meanwhile, the firm expects gross domestic product (GDP) growth to slow to 1%, the lowest level since 2020.

Stock market expectations have also been downgraded in response to these economic concerns. Goldman strategists, led by David Kostin, warned clients that they expect the S&P 500 index to decline by 5% over the next three months. They have set a price target of 5,300 for the index in that time frame. Over the next year, they project the S&P 500 will rise by only 6%, setting a new year-ahead target of 5,900. This marks a substantial downward revision from Goldman’s previous forecast of 6,500, which was issued as recently as February 28. The nearly 10% cut in expectations reflects the increasing uncertainty surrounding Trump’s trade policies.

Big Number

6.3%—That is how much the S&P 500 declined in March through Friday’s close, putting it on track for its worst month since September 2022. This figure does not even account for an additional drop of more than 1% in premarket trading on Monday.

Key Background

On Sunday, Trump announced that he plans to impose “substantial” import taxes on “all countries” through his new reciprocal tariff policy. This marks a shift from his position just a week earlier, when he suggested that the upcoming tariffs would be “more lenient.”

Trump’s top economic official, Treasury Secretary Scott Bessent, has acknowledged that a recession is possible but has argued that any downturn would be due to unsustainable economic growth fueled by excessive government spending and imbalanced trade relationships. However, some economists have cautioned that Trump’s policies could push the U.S. into an avoidable recession. UCLA Anderson School of Management economist Clement Bohr issued a stark warning to Trump earlier this month: “If all your wishes come true, you could very well be the author of a deep recession.”

The financial markets are particularly concerned about the potential inflationary effects of tariffs. Higher tariffs typically lead to higher prices for imported goods, which could drive overall inflation upward. Persistent inflation, in turn, might force the Federal Reserve to reconsider its plans for further interest rate cuts. If the Fed decides to keep rates high to combat inflation, borrowing costs would remain elevated, potentially hurting corporate profit margins and weakening consumer demand.

Trump’s trade policies have been a point of contention among economists and investors alike. While he has long argued that tariffs will protect American industries and create jobs, critics say that the economic consequences—including higher costs for businesses and consumers—outweigh any potential benefits. Goldman’s latest forecast suggests that these concerns are becoming more widely accepted on Wall Street.

The uncertainty surrounding Trump’s tariff policy has already taken a toll on the stock market. The S&P 500’s steep decline in March suggests that investors are increasingly worried about the economic outlook. Should Trump move forward with his plans for aggressive tariffs, market volatility could continue in the coming months.

Goldman Sachs is not alone in its pessimism. Other major financial institutions have also sounded alarms about the potential economic impact of Trump’s trade policies. Many analysts believe that if tariffs remain in place or are expanded further, the risks of a prolonged economic slowdown will increase.

While the White House has maintained that tariffs will ultimately benefit the economy by reducing reliance on foreign goods, the short-term consequences appear to be negative. Businesses that rely on imported materials are already facing higher costs, and many have signaled that they will pass these costs on to consumers. This could exacerbate inflationary pressures at a time when the Federal Reserve is trying to bring inflation under control.

The bond market has also reacted to these developments, with yields on long-term U.S. Treasury bonds rising in response to inflation concerns. Higher bond yields can lead to tighter financial conditions, further slowing economic growth.

As uncertainty looms, investors will be closely watching Trump’s official announcement on Wednesday to see if his latest tariff proposals will be as severe as he has suggested. If the tariffs are implemented as planned, further market turbulence could follow.

For now, Goldman Sachs’ downgrade serves as a stark reminder of the risks facing the U.S. economy. The firm’s decision to cut its stock market targets and raise its recession probability reflects growing concerns that Trump’s trade policies could have unintended economic consequences. With inflation, unemployment, and GDP growth all expected to worsen, the outlook for the economy remains uncertain.

In the weeks ahead, economic data and corporate earnings reports will provide further insight into how businesses and consumers are responding to these policy changes. If inflation continues to rise and economic growth slows further, the Fed may have to reconsider its monetary policy stance, which could add another layer of complexity to an already volatile market environment.

Ultimately, the extent to which Trump’s tariffs impact the economy will depend on how businesses, consumers, and policymakers respond. If companies find ways to absorb higher costs without passing them on to consumers, the inflationary impact could be limited. However, if prices rise significantly, the Fed may have no choice but to keep interest rates high, potentially leading to a broader economic slowdown.

In the meantime, investors should brace for continued uncertainty. Goldman Sachs’ revised forecast suggests that market conditions could remain challenging in the near term. While long-term economic fundamentals remain strong, the immediate risks posed by Trump’s trade policies cannot be ignored.

With the S&P 500 already experiencing its worst month since 2022, the coming weeks will be critical in determining whether the market can stabilize or if further declines are ahead. The outcome of Trump’s tariff policy will likely play a key role in shaping economic and market trends for the remainder of the year.

As always, market participants will be watching closely to see how the administration’s policies evolve and whether additional economic measures are introduced to counteract potential negative effects. For now, Goldman Sachs’ latest predictions underscore the uncertainty and risks facing the U.S. economy in 2025.

Tech billionaire Elon Musk announced on Thursday that he will step down from his position in the Donald Trump administration at the end of May after overseeing a $1 trillion reduction in the U.S. deficit. Musk, who was appointed as a “special government employee” for a 130-day term, has led cost-cutting initiatives as the head of the Department of Government Efficiency (DOGE).

Musk Calls It a ‘Revolution in Government’

In an interview with Fox News, Musk described his tenure as a historic transformation in federal spending.

“This is a revolution, possibly the biggest in government since the original revolution,” Musk said. “In the end, America will be in a much stronger position, with a fantastic future ahead.”

Musk, 53, who also heads Tesla and SpaceX and owns social media platform X, has received both praise and criticism for his aggressive cost-cutting strategies. Under DOGE, an agency composed of engineers and entrepreneurs, tens of thousands of federal employees have been laid off, and funding for multiple programs has been slashed.

Musk Confirms 130-Day Term Limit

When asked if he would extend his tenure, Musk stated that he believes his objectives will be largely completed by then.

“I think we will have accomplished the majority of what’s needed to cut the deficit by $1 trillion within that timeframe,” he said.

According to DOGE’s website, as of March 27, the agency has saved American taxpayers approximately $130 billion, equating to about $807 per person.

Eliminating Waste and Fraud: A 15% Cut is ‘Achievable’

Musk and his seven-member DOGE team—including Steve Davis, Joe Gebbia, Aram Moghaddassi, Brad Smith, Anthony Armstrong, Tom Krause, and Tyler Hassen—have focused on reducing government inefficiencies.

“Our goal is to cut spending by eliminating waste and fraud, aiming for a 15% reduction, which seems entirely realistic,” Musk told Fox News’ Bret Baier.

“The government operates inefficiently, with significant waste and fraud. We are confident that a 15% cut can be achieved without impacting critical services.”

Federal Credit Card Oversight: ‘This Doesn’t Make Sense’

A key area of DOGE’s focus has been federal credit card usage. DOGE member Steve Davis pointed out that there are around 4.6 million government-issued credit cards for an estimated 2.3 to 2.4 million employees.

“This doesn’t add up,” Davis said. “We’ve asked agencies whether they actually need all these cards, if they are being used, and if they can physically account for them.”

Musk called the situation absurd.

“There shouldn’t be more government credit cards than there are employees,” he said.

Criticism Over Lack of Oversight

Despite the administration’s claims of efficiency, critics argue that DOGE wields too much authority with insufficient oversight. Opponents allege that Musk’s team has unilaterally canceled federal contracts and implemented budget cuts without congressional approval.

Musk dismissed these concerns, insisting that his team takes a meticulous approach to decision-making.

“Some may say we’re making impulsive cuts, but that’s far from the truth,” Musk said. “We double-check, even triple-check, before making a decision.”

He also acknowledged that mistakes can happen.

“That’s not to say we don’t make errors. Expecting a flawless approach is like demanding a baseball player to bat a thousand—it’s impossible. When we make mistakes, we correct them quickly and move forward.”