And it doesn’t seem like it will end soon, unless …
“Trump may actually want a recession…”
That would explain a lot. He’s not very effective at much, but he is effective at setting the preconditions for a recession. From Yahoo!Finance quoting the Kobeissi Letter:
Global Imbalances as Global Recession EWS?
EWS = “Early Warning System”. Jamel Saadaoui has an interesting blogpost, investigating whether the median current account to GDP balance — namely when it becomes very negative, -2% to -4% — presages a global recession as defined by Kose et al. (2020).
Policy Uncertainty Watch
Data through yesterday, from Baker, Bloom and Davis:
Taking Economic Policy Uncertainty Seriously
EPU has risen from a 2016-2024 level of 136 to a 2025 level of 430. Ferrara and Geurin (2018) find that a 90 pt increase results in a bit less than 2% decline in employment at the one year horizon.
Nowcasted Equipment Investment Decelerates
Why? Q2 equipment investment as implied by GDPNow of 5/30.
Measured Trade Policy Uncertainty Spikes
Graph for data through 5/30 for Baker, Bloom and Davis index.
GDP and “Core GDP” Nowcasts
Where “core” GDP (per Furman) is final sales to private domestic purchasers.
Trump Predicts at Least 3% Growth
At least it’s mercifully less than the 4% that he promised last time (but 9% is more than last time)
Despite Upward Revisions, Sentiment Still Looks Pretty Poor
Final May figures for Michigan survey are out. As noted in the release, final figures are more positive with the inclusion of post-pause responses. Here’s the picture of confidence and sentiment, updated.