The US economy recorded its worst quarterly performance since 2022, with a contraction of 0.3% in the first quarter of 2025. The result, released by the Department of Commerce, negatively surprised the analysts, who expected growth of 0.3% in the period.
The American (GDP) is mainly attributed to the changes implemented by Donald Trump in the country’s commercial and financial policy. Consumption, the main engine of the US economy, was strongly affected by the population’s fears in relation to the “tariff” imposed by the Republican.
The US government recognized the impact of rates on decreasing population spending in the first three months of the year. Consumer confidence has reached the smallest level since Covid-19 pandemic, directly influencing the GDP result.
While consumers reduced their expenses, companies significantly increased their imports, preparing to increase rates. Purchases of foreign products grew 41% in the period, expanding the American commercial deficit.
Market reaction and perspectives
Trump tried to distance himself from the economic fall, but acknowledged that tariffs will impact consumption and prices for Americans. The president reinforced his desire to negotiate with Chinese leader Xi Jinping, highlighting the bad performance of Chinese industrial activity in April.
Economic analysts indicate that and tried to anticipate inventories to the fullest. The change in import and storage patterns indicates that despite the public support of some entrepreneurs to Trump, behind the scenes there is a great apprehension of the country’s economic future.
The Federal Reserve (Fed) now faces the challenge of balanced its decisions about interest rates in the face of this new scenario. With 2% and reaching 3.6%, the American Central Bank can be forced to reconsider its monetary policy strategy in the coming months.
