U.S. economy steadies as tariff risks test inflation

Key Takeaways:

• Mixed signals characterize outlook despite resilient economic indicators.
• Resilient data coexists with mounting risks and policy uncertainties.
• Strength persists, yet doubts grow about sustainability and credibility.

President Donald Trump says the economy, markets, and national security are “stronger than ever.” The latest signals point to resilience alongside material risks and credibility questions.

Recent growth and jobs data appear solid, but economists warn that the tariffs impact on inflation, investment, and sentiment could re‑accelerate price pressures. Reactions to the U.S. national security strategy 2025 are also divided, with allies voicing concern over strategic shifts.

Economic momentum picked up late last year, with the United States posting its strongest quarterly growth in two years, as per Greek City Times. That headline strength coexists with lingering uncertainty over trade policy, fiscal path, and corporate investment.

According to the International Monetary Fund, the economy remained “robust, dynamic, and adaptable,” with activity and employment exceeding expectations and inflation easing without major disruption. The same assessment flagged sizable fiscal deficits, rising public debt, growing protectionism, and banking vulnerabilities as key risks.

As reported by The Guardian, Nobel laureate Joseph Stiglitz warns that escalating tariffs and policy unpredictability deter investment and raise the risk of renewed inflation, up to and including stagflation. In other words, tariffs impact on inflation can transmit through higher import costs and supply‑chain frictions, while uncertainty depresses capital formation.

According to Chatham House, policy whiplash and attacks on independent economic institutions are eroding trust in official data and governance. Its analysis highlights concerns about leadership changes at statistical agencies and the implications for data integrity.

Some economists also dispute claims about tariff revenues and market outperformance; the evidence does not show “trillions” flowing from tariffs or unequivocal leadership in equity returns. “That boast is nonsense, Washington isn’t taking in ‘trillions of dollars’ in tariff income,” said Justin Wolfers, economist at the University of Michigan, as reported by Yahoo News.

European officials reacted with alarm to the U.S. national security strategy 2025, concerned that its framing of threats, especially regarding Russia, and rhetoric toward Europe could strain alliances, as reported by WUSF. That reception underscores a credibility gap between Washington’s stated priorities and allied risk perceptions.

The Stimson Center notes that the strategy’s narrower, interest‑driven focus avoids overpromising and emphasizes capabilities, but cautions that several pillars still assume U.S. industrial and military primacy that may be hard to realize. Implementation discipline will determine whether priorities translate into outcomes.

According to the Cato Institute, encouraging greater European burden‑sharing and de‑emphasizing Middle Eastern interventions are constructive shifts, but execution risk remains high under unpredictable decision‑making. Strategy documents can diverge from on‑the‑ground policy.

According to Forbes, Trump’s personal gains from cryptocurrencies since 2024 are estimated in the billions, and a Reuters report added that his family entities booked more than $800 million from crypto sales in the first half of 2025. That financial entanglement, alongside pro‑crypto policy signals, has prompted scrutiny over perceived conflicts and regulatory consistency.

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