President Donald Trump says he's focusing on the long term as economic indicators soften

WASHINGTON — As a candidate, President Donald Trump promised that he would end inflation "on Day One."

Two months into his second term, amid lagging consumer confidence and dips in the stock market, Trump's economic message has shifted from pledges of immediate price drops to warnings of "a little disturbance."

As Trump rolls out new tariffs and moves forward with shrinking the federal workforce, his economic messaging lately has focused on bracing Americans for a potential short-term hit with the promise of a long-term benefit.

"There will be a little disturbance, but we're OK with that. It won't be much," Trump said of his tariff plans during a March 4 address to Congress.

Lately both Wall Street and Main Street have been responding with unease over the on again, off again nature of his tariffs, said economic analysts interviewed by Newsday.

While the markets roared when Trump was elected, those gains have since been wiped out and other economic data has started to signal a slowing of the economy. The S&P 500 index is lower than where it was before Nov. 6. The economy is on track to experience negative growth in the first quarter after initial projections of growth, according to recent reports from Morgan Stanley and the Atlanta Federal Reserve. And consumer confidence dropped in February by the largest amount since August 2021, according to data collected by the Conference Board.

"This is a very popular president. He's listened to by a lot of people in the country. If he says that the economy is going to go through some turbulence, people will believe that," said Hofstra University economics professor Herman A. Berliner. "He’s an enormously influential person in terms of both steering the economy and reassuring the country about the economy."

'Period of transition'

A day after Trump declined to rule out a recession during a March 9 interview with Fox News host Maria Bartiromo, the stock market experienced its sharpest decline of the year.

"I hate to predict things like that," Trump said when asked about the prospect of a recession. "There is a period of transition because what we're doing is very big. We're bringing wealth back to America. That's a big thing ... it takes a little time, but I think it should be great for us."

On Wednesday, Federal Reserve Chairman Jerome Powell said the overall chances of entering a recession remained low, despite upticks in some economic forecasts that predict the likelihood of a recession.

"If you go back two months people were saying that the likelihood of a recession was extremely low. So it has moved up but it's not high," Powell said at a news conference.

Powell noted Trump’s tariff agenda — which includes recently imposed tariffs on Canada, China and Mexico and a looming April 2 launch for reciprocal tariffs on countries who tariff U.S. goods — has revved up expectations for inflation, as retailers often pass at least some of the cost of import fees on to consumers.

"Some near-term measures of inflation expectations have recently moved up," Powell said. "We see this in both market and survey based measures. And survey respondents, both consumers and businesses, are mentioning tariffs as a driving factor."

Potential price increases

Retailers including Best Buy, Target and Walmart earlier in the month issued warnings about the potential for price hikes stemming from the patchwork of tariffs, and the Federal Reserve Bank of New York’s most recent monthly survey of consumers found "year-ahead expectations about their households’ financial situations deteriorated considerably in February."

"The share of households expecting a worse financial situation one year from now rose to 27.4%, its highest level since November 2023," according to the New York Fed’s February survey.

Trump last week, responding to back-to-back days of drops in the market, reframed his response to recessionary concerns.

"I don’t see it at all. I think this country is going to boom," Trump said, when asked by an ABC News reporter if he believed the country was heading toward a recession. "But as I said, I can do it the easy way or the hard way. The hard way to do it is exactly what I'm doing. But the results are going to be 20 times greater."

Kara Alaimo, an associate professor of communication at Fairleigh Dickinson University, who has studied the influence of presidential rhetoric on the economy, said "presidential messaging on the economy is uniquely powerful," because "our economy is grounded in psychology: economic outcomes are determined in part by the attitudes about the economy that Americans hold."

"If presidents can convincingly project optimism about the economy, they can increase consumer confidence and convince people to spend money, which is one measure of the strength of the economy," Alaimo said in an email to Newsday.

Alaimo, a former Treasury Department spokesperson during the Obama Administration, noted that a study by Texas A & M University political science professor B. Dan Wood of all public remarks by 12 presidents between 1945 and 2004 "confirmed that optimistic presidential rhetoric led to improved consumer confidence, which ultimately improved both actual economic performance and presidential approval ratings."

Long-term confidence

Trump’s top economic advisers meanwhile continue to blitz the Sunday morning political talk shows and cable news shows, expressing confidence in the long-term impact of the administration’s economic agenda

"I’m not worried about the markets," said Treasury Secretary Scott Bessent during an appearance on NBC’s "Meet the Press" earlier this month. "Over the long term, if we put good tax policy in place, deregulation and energy security, the markets will do great."

As for the short term, Trump’s top economic adviser Kevin Hassett, director of the National Economic Council, when asked last Monday on CNBC about the unease over a looming trade war, conceded: "Absolutely, between now and April 2, there’ll be some uncertainty."

By Laura Figueroa Hernandez

laura.figueroa@newsday.com@Laura_Figueroa

Laura Figueroa Hernandez is the White House correspondent and previously covered New York City politics and government. She joined Newsday in 2012 after covering state and local politics for The Miami Herald.