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U.S. consumers got a little psyched out in February. Consumer confidence dropped sharply, according to The Conference Board, and the consumer expectations index — what they think about income, business conditions, the job market — dropped significantly. Consumers also believe inflation is going to get worse in the next 12 months. And inflation expectations can be a dangerous thing.
All the talk about tariffs is one factor freaking consumers out.
“Tariffs on Mexico, tariffs on Canada, reciprocal tariffs across the board,” said Alan Detmeister, an economist at UBS.
“There were even tariffs floated on Panama and Denmark and Greenland,” he said. “All of this is a concern because it could get into the inflation psychology, and people are hearing this and are like, ‘Oh, tariffs are coming. They’re going to push up inflation a lot.’”
In surveys, Republicans are less concerned about inflation or not at all, Democrats much more concerned. But the numbers aren’t totally partisan — independents are also worried.
“You can see it in the …
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