Federal Reserve officials predict weaker growth, higher unemployment and higher inflation than they did last November. Scroll down for details.
THURSDAY 3/20/25
Dropping Out – President Trump is expected to order Education Secretary Linda McMahon, to shut down her new department Thursday, NPR’s Morning Edition reports. Trump is to announce closing of the federal department “and return educational authority to the States” in a White House ceremony Thursday with the Republican governors of Texas, Indiana, Florida and Ohio.
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Un-Softening the Landing? – Citing concerns over President Trump’s tariff policy, the Federal Reserve Open Market Committee in its meeting Tuesday and Wednesday lowered gross domestic product projections for 2025 to a median of +1.7%, which is significantly lower than the 2.5% GDP growth the US enjoyed in 2024.
The range projected by the committee range from just +1% GDP to 2.4%.
“Federal projections see the economy dramatically reset by Trump’s election,” The Wall Street Journal reports, after Fed officials previously expected a “soft landing” when it carefully increased interest rates last year while trying to avoid triggering higher unemployment. Fed officials now project higher unemployment, higher inflation and weaker growth.
Fed Chair Jerome Powell (pictured) called the expected effect of tariffs on the inflation rate “transitory.”
“We now have inflation coming in the form of an exogenous source,” Powell said in his press conference Wednesday, “but the underlying inflationary picture before was basically 2½% inflation, 2% growth and 4% unemployment.”
Core inflation was 2.8% in 2024, and the Fed Open Market Committee projected a range of 2.5% to 3.5% in 2025, with a median expectation of +2.8%. The Fed did not cut interest rates this week but despite the tariff threat still plans two cuts later this year.
Trump said Wednesday that the Fed should cut interest rates “as the US tariffs start to transition (ease!) their way into the economy,” Reuters reports.
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Happy Happiness Day – Thursday is World Happiness Day, and the World Happiness Report, compiled with Gallup Analytics, again names Nordic countries among the happiest in the world.
Finland is number-one, according to the report, followed by 2.) Denmark, 3.) Iceland, 4.) Sweden, 5.) The Netherlands, 6.) Costa Rica, 7.) Norway, 8.) Israel, 9.) Luxembourg and 10.) Mexico.
Canada is number-18. The US is 24th.
Number 66 is the Russian Federation and 68 is China.
Ukraine? It’s 111th. Afghanistan is in last-place at number 147.
Semafor holds a World Happiness Day launch event on YouTube here.
--Compiled and edited by Todd Lassa