Consumer confidence in the US has plummeted to its lowest level since May 2020, as President Trump's erratic trade policies and tariffs heighten fears of inflation and a potential recession. The Conference Board's survey shows a significant decline in the Expectations Index and an increase in the number of Americans anticipating a recession, with tariffs being a major concern among consumers. Despite past resilience in consumer spending during economic uncertainty, Fed officials are now worried about the potential for a real pullback in spending. Inflation expectations have risen, complicating the Federal Reserve's efforts to manage inflation, especially if the trade war continues to drive prices up. The Republican-led Congress is expected to pass legislation extending Trump's 2017 tax cuts, which may eventually boost the economy, but concerns remain about the immediate impact of current fiscal policies.

Consumer confidence has dropped significantly due to President Trump's trade war and tariffs, with the Conference Board reporting a 7.9-point decline in April, marking the lowest confidence level since May 2020.

The Expectations Index, reflecting consumer outlook on the economy, has fallen to its lowest level in 13 years, with a notable increase in the number of Americans expecting a recession in the near future.

Concerns about tariffs are prominent among consumers, as they fear rising prices and negative economic impacts, which has also contributed to a chilling effect on Wall Street.

Despite high inflation and economic uncertainty, past trends have shown that consumer spending did not significantly weaken; however, Fed officials are now concerned that the current economic mood might lead to reduced spending.

Inflation expectations have surged to 7%, complicating the Federal Reserve's efforts to control inflation, as consumer perceptions of rising prices can lead to self-fulfilling inflationary behavior.

Congress is expected to extend Trump's 2017 tax cuts, potentially boosting the economy in the long run, but immediate concerns about tariffs and fiscal policies persist.

Trump's proposal to eliminate income taxes in favor of tariff revenue faces significant challenges, adding to the uncertainty surrounding his economic policies.