Federal Reserve Warns Trump’s Economy Is About to Get Whole Lot Worse

The Federal Reserve is forecasting aggressive stagflation for the remainder of 2025.

Inflation is expected to go up to 3 percent, GDP growth is expected to fall by 1.4 percent, and unemployment will rise to 4.5 percent, the Fed announced Wednesday.

This report comes as the Trump administration weighs further aiding Israel in its war on Iran, a move that could seriously destabilize the region and multiple economies, including our own. There’s also Trump’s “One Big Beautiful Bill Act,” which is expected to add $2.8 trillion to the deficit and reward tax cuts to wealthy individuals and corporations while slashing Medicaid and other social welfare programs.

Fed Chair Jerome Powell took to the podium on Wednesday to reaffirm what he’s been saying for months: This economic downturn is a direct result of President Trump’s tariffs.

“Increases in tariffs this year are likely to push up prices and weigh on economic activity. The effects on inflation could be short-lived, reflecting a onetime shift in the price level. It’s also possible that the inflationary effects could instead be more persistent,” Powell said. “Avoiding that outcome will depend on the size of the tariff effects, on how long it takes for them to pass through fully into prices, and ultimately, on keeping long-term inflation expectations well-anchored.”

The Fed has refused to cut interest rates as a result of the projected stagflation. Trump has yet to comment on the Fed’s report.

Donald Trump claimed to have intelligence Wednesday … but he doesn’t seem to know what he has intelligence about.

As tensions continue to build in the Middle East following Israel’s brutal strikes against Iran, the U.S. president took a break from the Situation Room to host an entirely unnecessary flag-raising ceremony on two newly erected flagpoles at the White House. While standing with members of his family, Trump halfheartedly responded to a question from the press, revealing just how little he knows about the situation in Iran.

“Do you have any intelligence that Iran is targeting—” asked one reporter.

“I have intelligence,” Trump said, grinning.

He continued speaking inaudibly as the reporter finished her question: “that Iran is targeting any U.S. assets?”

“We’re doing very well, thank you,” Trump replied, before dismissing the press.

Trump’s director of national intelligence was left scrambling this week after the president said he “didn’t care” about his own government’s assessment that Iran was still years away from acquiring a nuclear weapon because he thinks “they were very close to having it.” Intelligence chief Tulsi Gabbard ultimately opted to lie and say that she and the president were in total agreement—despite saying the exact opposite just a few months ago.

Trump is simply parroting rhetoric from the Israeli government, which has repeatedly touted Iran’s nascent nuclear capabilities as a justification for its sweeping military operation there. The U.S. president has given Israel the green light to continue its assault on Iran, leaving the door open for further U.S. military intervention.

Two officials familiar with Trump’s ongoing discussions about getting involved in Iran told CNN that the president was warming up to the idea of using U.S. military assets in the Middle East. The U.S. has already sent two aircraft carriers to the region.

Senator Josh Hawley has added his name to the short list of Republicans in Congress voicing their opposition to Trump’s current and potential further support of Israel’s war on Iran.

“Josh Hawley, who spoke to Trump last night, told me he ‘would not’ be comfortable if the US took offensive action against Iran,” CNN’s Manu Raju posted on X on Wednesday.

“I don’t want us fighting a war. I don’t want another Mideast war.... I’m a little concerned about our sudden military buildup in the region,” Hawley told Raju. “I think Trump’s message to them is if you don’t [give up nukes], you’re on your own with Israel. I think all that’s fine. It’s a very different thing though for us to then say, but we are going to offensively … go strike Iran or insert ourselves into the conflict?”

“Trump’s offering [Iran] an off-ramp. Take the off-ramp,” he continued. “If not, you’re going to be on your own with Israel, but I don’t think there’s a need for the United States to affirmatively insert ourselves.”

There is a growing split between traditional war hawk neocons and MAGA Republicans grasping on to the last dregs of Trump’s promises of “America First” and an end to endless wars. But whether Hawley’s concern will turn into a serious attempt to stop Trump’s current trajectory remains to be seen.

Defense Secretary Pete Hegseth clumsily dodged a question about where he’d draw the line on the use of federal forces against protesters.

During a hearing of the Senate Armed Services Committee Wednesday, Senator Mazie Hirono, a Democrat from Hawaii, pressed Hegseth on whether he would carry out an order from the president “to shoot peaceful protesters in the legs.”

“Senator, as I’ve said before, of course I reject the premise of your question,” Hegseth replied. “And the characterization that I would be given or are given unlawful orders, it’s all meant as an attempt to smear the commander in chief, and I won’t fall for it.”

Hirono pointed out that the question was anything but hypothetical: “Considering that the president, in his first term, actually ordered such a thing, it’s not a premise that you can reject,” she replied.

During the widespread protests in the wake of George Floyd’s murder in 2020, Donald Trump had been enraged at the demonstrators and reportedly inquired to his Cabinet whether they could “just shoot them in the legs or something?” Former Defense Secretary Mark Esper called the president’s startling inquiry “a suggestion and a formal question.”

Hirono said that Trump might do the same to quell other protests, such as those in Los Angeles opposing sweeping immigration raids. “I think you would just follow what the president wants you to do,” she surmised.

Hirono also directly asked Hegseth whether he would remove federal forces from Los Angeles if a court ordered him to do so. Last week, he’d pushed back on the idea that “local judges” (read: federal judges) could interfere with the president’s plans.

“If a court says this deployment of troops into our cities is not legal, would you follow that court’s order?” Hirono asked.

Hegseth said that the issue was still pending, before doubling down on his statement attacking the courts. “I don’t believe district courts should be determining national security policy. When it goes to the Supreme Court, we’ll see,” he said.

“I take it that you don’t consider district court decisions to be legitimate,” Hirono summarized.

This has become a common defense for lawlessness by the Trump administration, which has argued that the courts have no place in challenging practically any aspect of the president’s agenda, from deportations to tariffs. As desperate as members of the Trump administration are to dismiss federal judges as so-called “local,” the courts remain a crucial pillar in the country’s checks and balances as set out in the U.S. Constitution.

Team Trump clearly hopes to send every decision up the pipeline to the conservative-majority Supreme Court, which more regularly sides with Trump.

On Tuesday, an appeals court seemed inclined to allow Trump’s federalization of the National Guard in Los Angeles, according to The New York Times.

President Trump took time on Wednesday to reaffirm his unwavering support for Israeli Prime Minister Benjamin Netanyahu and his wars.

“I said, ‘Keep going.’ What do I say?” Trump said when asked about his recent conversations with Netanyahu. “I speak to him every day. He’s a good man … been very unfairly treated by his country, I think. Very unfairly.”

“Have you given him any indication that you may seek to aid them more than you have already?” a reporter asked.

“No.”

At this point in the Israel-Iran conflict, the U.S. has offered Israel intelligence and helped shoot Iranian missiles out of the air. Trump has also left the door open for further U.S. military intervention, a development that would make Netanyahu’s job that much easier.

Trump doesn’t seem willing to budge on his support for Israel’s unprovoked attack on Iran under the guise of some potential nuclear threat, even as many in his own base oppose it in the name of “America First.” If anything, this war offers Netanyahu some temporary reprieve from attention on his genocide in Gaza.

If Trump believes Netanyahu is being treated unfairly even as he commits genocide in Gaza and provokes all-out war with Iran, all while failing to both eliminate Hamas and free all the Israeli hostages, then Trump is even more blindly committed to the prime minister than initially feared.