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Experts Warn Fed Remarks Show Trump Policies Brewing 'Perfect Storm for a Recession'
"Donald Trump's tariffs mean you could suffer higher prices and lose your job AT THE SAME TIME," said Sen. Elizabeth Warren.
May 07, 2025
Alex Jacquez from the progressive think tank Groundwork Collaborative issued a stark warning to the U.S. public on Wednesday in response to a statement from the Federal Reserve committee that sets interest rates.
The new statement from the Federal Open Market Committee (FOMC) "provides further evidence that a perfect storm for a recession is brewing" under U.S. President Donald Trump, said Jacquez, Groundwork's chief of policy and advocacy. "Barely 100 days into Trump's second term, working families are already being crushed by sticky inflation and slowing growth."
"A Trump-engineered recession will devastate working families, but the president refuses to stand down on his failed trade war, no matter the cost," added Jacquez, who previously advised former President Barack Obama and Sen. Bernie Sanders (I-Vt.).
The FOMC said Wednesday that "the risks of higher unemployment and higher inflation have risen," and opted to keep the federal funds rate at 4.25-4.5%. The committee has maintained the rate for the past three meetings, following a series of cuts last year.
Trump on Sunday pushed for a rate cut, and though he has backed off a threat to try to oust Fed Chair Jerome Powell, the president "could reconsider if the economy stumbles in the coming months," The Associated Pressreported Wednesday.
According to the AP:
Asked at the press conference whether Trump's calls for lower rates [have] any influence on the Fed, Powell said, "[It] doesn’t affect doing our job at all. We're always going to consider only the economic data, the outlook, the balance of risks, and that's it."
If the Fed were to cut rates, it could lower other borrowing costs, such as for mortgages, auto loans, and credit cards, though that is not guaranteed.
Addressing Trump's evolving tariff policy, Powell said Wednesday that "if the large increases in tariffs that have been announced are sustained, they're likely to generate a rise in inflation, a slowdown in economic growth, and a rise in unemployment."
Sharing a video of his remarks on social media, Sen. Elizabeth Warren (D-Mass.) stressed that Trump's tariffs mean higher prices.
Donald Trump's tariffs mean you could suffer higher prices and lose your job AT THE SAME TIME. Forget dolls, families will be forced to make impossible choices between necessities like food, housing, and health care.
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— Elizabeth Warren ( @warren.senate.gov) May 7, 2025 at 3:13 PM
In a Wednesday blog post, former Labor Secretary Robert Reich wrote: "Recall that last November, the single biggest reason voters gave in exit polls for choosing Trump was that he'd bring prices down... Although Trump has scaled back some tariffs and paused others as he seeks trade deals with foreign nations, his tariffs are already eating into household budgets."
Reich highlighted comments about price hikes from companies whose products include everything from baby supplies and laundry detergent to paper towels and tools. He also emphasized that "tariffs will particularly hurt small businesses."
"This bodes ill for American workers, since 80% of U.S. employment comes from small businesses with fewer than 500 workers. The likely result: higher unemployment," he explained, projecting price hikes and job losses this month. "But here's the question: Will consumers and workers realize Trump is the cause? And if they do, will they remember this by the November 2026 midterm elections?"
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Tariffs Won't Help US Workers. A Job Guarantee Would.
As we confront what some are expecting to be the third once-in-a-generation economic downturn in less than two decades, we need to be ready with real solutions.
Apr 30, 2025
President Trump has given many contradictory reasons for his recent tariff spree, including claiming tariffs will “create jobs like we have never seen before.”
Yet research shows that tariffs don’t increase employment and instead are likely to cost jobs due to increased input prices and retaliatory tariffs. Economist Michael Strain at the conservative American Enterprise Institute expects Trump’s tariffs will lead to "recessionary levels" of unemployment. Ironically, analysts expect the rural and Heartland communities that voted for Trump will be disproportionately negatively impacted by retaliatory tariffs. Given how this Administration has cavalierly forced tens of thousands of federal workers out of good jobs and destroyed just as many research and nonprofit jobs supported by federal grants, it’s clear that employing Americans has never been the true priority.
A federal job guarantee is a public option for a good job—with living wages, full benefits, and union protections—on projects that meet community needs for physical and human infrastructure that are often long-overlooked.
But it should be a national priority. And we have a much better solution than tariffs: a job guarantee.
A federal job guarantee is a public option for a good job—with living wages, full benefits, and union protections—on projects that meet community needs for physical and human infrastructure that are often long-overlooked. Repairing bridges, helping communities recover from disasters, providing quality care for children and the elderly, fixing potholes, and expanding tree canopy to mitigate extreme heat are just a few examples of the community-building work that would become possible with a job guarantee.
A job guarantee would address the failure of our economy to provide good jobs for all. Even during times of relatively low unemployment, millions of Americans—currently 7.9 million—want full-time work but cannot find it. This is a chronic crisis that disproportionately burdens rural communities and communities of color. Another 39 million American workers are stuck in jobs that pay below $17 per hour, often with precarious, unhealthy, and undignified working conditions. Guaranteed jobs would provide these workers with the option of stable employment and real economic security.
Tariffs may grab headlines, but they don’t build communities or deliver good jobs.
A job guarantee is not a new idea. The right to a “useful and remunerative” job was the number one item on the Economic Bill of Rights proposed by President Franklin D. Roosevelt in 1944. Guaranteed jobs were a central demand of the civil rights movement, from the 1963 March on Washington to Coretta Scott King’s advocacy throughout the 1970s. And it nearly became law: the original Humphrey Hawkins Full Employment Act of 1978 included a legally enforceable right to a job with the federal government acting as employer of last resort, though that provision was stripped from the watered-down version that eventually passed. In recent years, congressional leaders including senators Cory Booker and Bernie Sanders have supported versions of a job guarantee, and representative Ayanna Pressley introduced a Congressional resolution outlining a modernized federal job guarantee that would pay $25 per hour.
While we’ve never had a true federal job guarantee, successful public employment efforts demonstrate its practicality and potential. In the 1930’s, the Works Progress Administration employed 8.5 million people building physical infrastructure and artistic works that strengthened our economy and culture for decades. Smaller-scale “subsidized employment” programs that provide the on-the-job training and wraparound supports for workers facing barriers to employment (similar to what would be provided by a job guarantee) also have a strong track record of success.
A job guarantee is not a new idea. The right to a “useful and remunerative” job was the number one item on the Economic Bill of Rights proposed by President Franklin D. Roosevelt in 1944.
By producing not only good jobs but also vital infrastructure and services, a job guarantee bolsters families and the neighborhoods where they live. Moreover, it would generate “trickle-up” economic effects. Money would begin circulating in persistently-disinvested communities, creating opportunities for grocery stores, small businesses, and local entrepreneurship. And a public option for good jobs would put healthy pressure on private employers to better compensate their workers—elevating wages and benefits across the board.
Funded by the federal government and implemented locally, a job guarantee would create new opportunities for civic engagement, with communities suggesting new public investments that meet their needs and manifest their aspirations. This partnership could strengthen democracy and rebuild trust that government can work for working people.
Ultimately, a job guarantee would create a more stable, resilient, and equitable economy. By immediately providing jobs and income at the first sign of an economic downturn, it would act as an automatic stabilizer—maintaining consumer spending and preventing prolonged recessions and jobless recoveries. This would benefit the economy as a whole and protect marginalized Black workers who are the “last hired and first fired” when the economy sours. It would enable a “just transition” away from unsustainable industries and address the threat of job displacement posed by AI, creating new jobs protecting the environment and mitigating climate change.
And for those who would dismiss this as socialism, it’s worth emphasizing: the job guarantee simply ensures there is an available job. If the more “productive” private sector can offer something better, all the better—workers will have the freedom to choose.
As we confront what some are expecting to be the third once-in-a-generation economic downturn in less than two decades, we need to be ready with real solutions. Tariffs may grab headlines, but they don’t build communities or deliver good jobs. Instead, this administration’s chaotic policies are creating widespread economic uncertainty and strain. A federal job guarantee, by contrast, is a bold economic policy rooted in American history and grounded in the needs of workers who’ve been sidelined by our economic policies. If we want to empower workers and build a more resilient economy, we should start investing in real solutions—starting with a job guarantee.
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US Workers Are So Much Better Off Today Than 4 Years Ago—It's Not Even Close
Here are some of the economic facts.
Sep 06, 2024
This is not a tough one. First and foremost, workers are better off today because they overwhelmingly have jobs if they want them. They also are getting higher pay, even after adjusting for inflation. And they tell us they are much more satisfied at their jobs.
When President Biden took office, the unemployment rate was 6.4 percent. It is currently 4.3 percent. For most of his presidency the unemployment rate has been below 4.0 percent, a stretch of low unemployment not seen in more than half a century.
The story looks even better if we look at the percentage of people who have jobs, since many people are not counted as being unemployed if they don’t even look for work because of a weak labor market.
In January of 2021, the share of people in their prime working years (ages 25 to 54) who had jobs was 76.4 percent. In the most recent data, it stood at 80.9 percent, 4.6 percentage points higher.
This is not just an issue of millions more people being able to get jobs. When the labor market is as strong as it has been, workers can have their choice of jobs. They can leave jobs where the pay is low, the workplace is unsafe, or the boss is a jerk.
The United States is the only wealthy country where workers have seen substantial wage growth since the pandemic. In most countries wages have fallen behind inflation.
Workers switched jobs in record numbers in the years 2021-2023. Tens of millions of people quit their jobs and moved on to better ones. One result was that workers reported the highest rate of job satisfaction on record. This is a big deal, since most workers spend a large share of their waking hours on the job.
The tight labor market also gave workers the power to resist employers’ demands that they return to the office when the worst of the pandemic was over. As a result, the number of people who report being able to work from home has increased by 19 million from the pre-pandemic level.
This shift has been largely ignored by the media, but these workers are saving hundreds of hours a year in commuting time and saving thousands on transportation and other commuting-related expenses. It’s true that the option to work from home is mostly available to higher paid workers, but 19 million people is nearly one-eighth of the workforce, not some tiny elite.
If working from home was a benefit that mostly went to higher paid workers, the pay increases disproportionately went to those at the bottom, reversing the pattern that had been in place for more than four decades. An analysis from the Economic Policy Institute found that wages for workers in the bottom ten percent of the wage distribution increased by 13.4 percent from before the pandemic, after adjusting for inflation.
Wages for workers in the middle increased by 3.0 percent over this period, also after adjusting for inflation. This is not great, but it is better than what we saw over most of the prior four decades, when wages were often stagnant or falling.
And this wage growth occurred in spite of a worldwide pandemic that whacked growth and caused inflation everywhere. The United States is the only wealthy country where workers have seen substantial wage growth since the pandemic. In most countries wages have fallen behind inflation.
It is also important to realize the world-leading recovery was not something that just happened. It was not inevitable that the economy would bounce back quickly from the pandemic shutdowns. There was very rapid job growth in the summer of 2020, as most of the shutdowns ended. But job growth slowed considerably in the fall. In the last three months of the Trump administration, we were creating jobs at the rate of just 140,000 a month. At that pace it would have taken us more than five and a half years to get back the jobs lost in the recession.
The Biden administration’s recovery package got back these jobs in less than a year and a half. The rapid job growth has continued so that we now have 6.4 million more jobs than we did before the pandemic. With the economy still growing at a good clip and inflation back to its pre-pandemic pace, for workers the future is bright.
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