Markus Andrews

A majority of Americans, 85%, have concerns about tariffs, a new NerdWallet survey finds. Other data points to plummeting consumer confidence.
As financial uncertainty looms, individuals are making different choices with their money.
Experts say it would be wise to start with bulking up emergency savings.

The Apple Fifth Avenue store in New York, U.S., on Monday, Feb. 24, 2025.
Michael Nagle | Bloomberg | Getty Images

Even as a pause on reciprocal tariffs has been put into effect, consumers are already anticipating the pressures of higher prices.
A majority of Americans — 85% — have concerns about the tariffs, according to a new NerdWallet survey of more than 2,000 individuals conducted this month.

Among top concerns of consumers is that the new policies will impact their ability to afford necessities and that the U.S. economy will fall into a recession.
Meanwhile, cracks in consumer confidence are showing elsewhere.
The University of Michigan’s consumer survey shows sentiment has dropped by more than 30% since December among persistent worries of a trade war. The latest reading for April fell 11% from the previous month, which was worse than expected.
The worries are not unfounded, experts say. Tariffs could cost the average household $3,800 per year, the Budget Lab at Yale University estimates.
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“Most Americans are worried about tariffs, and it’s actually impacting their spending plans,” said Kimberly Palmer, personal finance expert at NerdWallet.
In the next 12 months, a significant portion of individuals surveyed by NerdWallet plan to make changes to their spending habits, with a notable shift towards saving more.
Specifically, 45% plan to spend less on non-necessities, 33% intend to spend less on necessities, and 30% plan to save more money in an emergency fund. However, a smaller percentage, 14%, anticipate paying less on their debts.
The tariffs come as consumers were already struggling to pay for groceries and other essentials amid higher prices, according to Palmer.
“These tariffs are adding to that financial stress and basically forcing people to make some difficult decisions,” Palmer said. That includes scaling back on travel and planned big-ticket purchases like a car.

Emergency savings is ‘most important’ priority: expert

New economic pressures may prompt income to be eaten up by rising prices and competing interests, according to Stephen Kates, a certified financial planner and financial analyst at Bankrate.
Consumers may have to make tough choices between saving, investing and paying down debts.
“If you have nothing [saved], start with the emergency fund,” Kates said.
Individuals should strive to have at least one month of essential expenses set aside at the very minimum, Kates said. Ideally, that would be more like three to six months’ living expenses, he said.

That way, if a job or other income loss happens, consumers can protect themselves from going into debt, Kates said.
For individuals who already have racked up debt balances, prioritizing emergency savings still makes the most sense, Kates said. And if you’re choosing between emergency savings or saving for retirement, emergency savings should still be the highest priority, he said.
To be sure, that doesn’t necessarily mean individuals should ignore their other goals.
Kates discussed using what is called the “debt avalanche” strategy.
The focus is on paying down the debt with the highest interest rate first — while paying minimums on the others — then move on to the account with the next highest rate, and so on. That can provide an immediate return and help free up money in household budgets, Kates said.
When it comes to retirement savings, it’s important to make sure individuals are contributing enough to take advantage of a match, if their employer offers one, he said. More

In an op-ed Monday, Secretary of Education Linda McMahon explained the Education Department’s decision to resume “involuntary collections” of federal student loans that are in default.
Within weeks, borrowers should contact the government’s Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation. 
Borrowers who remain in default may eventually have their wages automatically garnished.

U.S. Secretary of Education Linda McMahon smiles during the signing event for an executive order to shut down the Department of Education next to U.S. President Donald Trump, in the East Room at the White House in Washington, D.C., U.S., March 20, 2025. 
Carlos Barria | Reuters

In a Wall Street Journal op-ed, U.S. Secretary of Education Linda McMahon explained the U.S. Department of Education’s decision to restart collections on federal student loans that are in default — and what comes next for Federal student loan borrowers who are behind on their bills.
“On May 5, we will begin the process of moving roughly 1.8 million borrowers into repayment plans and restart collections of loans in default,” McMahon wrote in the op-ed Monday.

“Borrowers who don’t make payments on time will see their credit scores go down, and in some cases their wages automatically garnished,” McMahon wrote.

Next steps for borrowers

Federal student loan borrowers in default will receive an e-mail over the next two weeks making them aware of this new policy, the Education Department said.
These borrowers should contact the government’s Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation. 
The Education Department said it is extending the Federal Student Aid call-center operations with weekend hours as well updating a “loan simulator” to help borrowers calculate their repayment plans. There is also an artificial intelligence assistant, dubbed Aidan, to help with a financial strategy.
“We are committed to ensuring that borrowers are paying back their loans, that they are fully supported in doing so, and that colleges can’t create such a massive liability for students and their families, jeopardizing their ability to achieve the American dream,” McMahon wrote.

‘Be proactive’

Those borrowers who are behind in their required payments should avoid being placed in default by taking advantage of various options currently available to them to manage their education loans, advised Kalman Chany, a financial aid consultant and author of The Princeton Review’s “Paying for College.”
“Be proactive,” he said. “Best to take care of this as soon as possible, as the loan servicers’ and the U.S. Department of Education’s customer support will get busier the closer it gets to May 5.”

The Education Department has not collected on defaulted student loans since March 2020. After the Covid pandemic-era pause on federal student loan payments expired in September 2023, the Biden administration offered borrowers another year in which they would be shielded from the impacts of missed payments. That relief period officially ended on Sept. 30, 2024.
“President Biden never had the authority to forgive student loans across the board, as the Supreme Court held in 2023,” McMahon wrote. “But for political gain, he dangled the carrot of loan forgiveness in front of young voters, among other things by keeping in place a temporary Covid-era deferment program.”
McMahon said restarting collections of loans in default was not meant “to be unkind to student borrowers.” Rather, the new policy intended to protect taxpayers. “Debt doesn’t go away; it gets transferred to others,” she said. “If borrowers don’t pay their debts to the government, taxpayers do.”
Currently, around 42 million Americans hold federal student loans and roughly 5.3 million borrowers are in default.
“It really is time to start repaying again,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget said in a statement. “While a short repayment pause was justifiable early in the pandemic, that was five years ago — and it makes no sense today.”
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President Donald Trump in March signed an executive order aimed at dismantling of the Education Department after nominating McMahon for Education secretary. Trump suggested that she would help gut the agency. As part of this overhaul, federal student loan management was then shifted to the Small Business Administration.
Along with changes to the student loan system, the Trump administration revised some of the Department of Education’s income-driven repayment plans, which put at-risk borrowers in “economic limbo,” according to Mike Pierce, executive director at the Student Borrower Protection Center.
“For five million people in default, federal law gives borrowers a way out of default and the right to make loan payments they can afford,” Pierce said in a statement. “Since February, Donald Trump and Linda McMahon have blocked these borrowers’ path out of default and are now feeding them into the maw of the government debt collection machine.”
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The U.S. Department of Education announced Monday that its Office of Federal Student Aid will resume “involuntary collections” on May 5 for federal student loans that are in default.
More than 5 million borrowers are currently in default, according to the Education Department, with another 4 million borrowers in “late-stage delinquency,” or over 90 days past-due on payments.

The headquarters of the Department of Education on March 12, 2025 in Washington, DC.
Win McNamee | Getty Images

The U.S. Department of Education announced Monday that its Office of Federal Student Aid will resume “involuntary collections” on May 5 for federal student loans that are in default.
Collections will be made through the so-called Treasury Offset Program, which can reduce or withhold payments from the government — such as tax refunds, Social Security benefits, federal salaries and other benefits paid through a federal agency — to satisfy a past-due debt to the government.

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” U.S. Secretary of Education Linda McMahon said in a statement. “The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear.”
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The Department has not collected on defaulted student loans since March 2020. After the Covid pandemic-era pause on federal student loan payments expired in September 2023, the Biden administration offered borrowers another year in which they would be shielded from the impacts of missed payments.
More than 5 million borrowers are currently in default, according to the Education Department, with another 4 million borrowers in “late-stage delinquency,” or over 90 days past-due on payments.

All borrowers in default will be notified via email by Office of Federal Student Aid in the next two weeks, the Department said. These borrowers can contact the government’s Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation. 

Borrowers who remain in default will be subject to “involuntary collections” and may eventually face administrative wage garnishment, the Education Department said.
“Borrowers who graduated during the pandemic may have no experience with loan repayment, so it is important to educate them about the process, including their rights and responsibilities,” said Higher education expert Mark Kantrowitz.
“Payment is due even if you are dissatisfied with the quality of the education you received,” he said. More

Overall, Americans expect they will need $1.26 million to retire comfortably, according to a recent study by Northwestern Mutual.
By some measures, workers, overall, are doing well but “the 2025 stock market has not spared many savers,” says Winnie Sun, a member of CNBC’s Advisor Council.
Market volatility, inflation and future uncertainty have all helped undermine retirement confidence.

Phoenix Wang | Moment | Getty Images

There’s been a persistent gap between how much money savers are putting away and how much they think they will need once they retire.
Yet this year, many Americans are scaling back their expectations.

For 2025, the “magic number” to retire comfortably is down to an average $1.26 million, a $200,000 drop from the $1.46 million reported last year, according to a new study from Northwestern Mutual, which polled more than 4,600 adults in January.
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“Americans’ ‘magic number’ to retire comfortably has come down,” John Roberts, chief field officer at Northwestern Mutual, said in a statement. Inflation has receded, Roberts said, and as a result, people are adjusting their outlook.
The 2025 figure is roughly in line with estimates from 2023 and 2022, which were $1.27 million and $1.25 million, respectively.
However, that retirement goal is still high, Roberts added, “far beyond what many people have actually saved.”

‘Magic number’ vs. average retirement balances

Last year, positive market conditions helped propel retirement account balances near new highs. 
As of the fourth quarter of 2024, 401(k) and individual retirement account balances notched the second-highest averages on record, boosted by better savings behaviors and stock gains, according to the latest data from Fidelity Investments, the nation’s largest provider of 401(k) savings plans.
The average 401(k) balance was $131,700 in the fourth quarter, while the average IRA balance stood at $127,534, according to Fidelity.

However, since then, U.S. markets have whipsawed. As of April 21, the S&P 500 is down roughly 10% year to date, while the Nasdaq Composite has sunk more than 15% in 2025. The Dow Jones Industrial Average has pulled back 8%. 
“The 2025 stock market has not spared many savers,” said Winnie Sun, co-founder and managing director of Sun Group Wealth Partners, based in Irvine, California. “Your portfolio is likely lower than it was before the new year.”

Why retirement confidence is sinking

Even after lowering the bar, more than half, or 51%, of Americans in Northwestern Mutual’s study expected to outlive their savings. Just 16% said that outcome would be “very unlikely.”
Last year, 54% of workers who were not yet retired said they expected to be financially ready for retirement when the time comes.
Currently, only about two-thirds, or 67%, of Americans in their planning years feel confident about their retirement prospects — down 7 percentage points from last year, according to a separate Retirement Planning study by Fidelity.

Workers today are largely on their own when it comes to their retirement security, which has also taken a toll on retirement confidence. “Notably, the current generation of retirees could be the last to use predictable sources of income such as pensions as the primary way they fund retirement,” Rita Assaf, vice president of retirement offerings at Fidelity Investments, said in a statement.
“The shift toward relying on retirement savings heightens the importance of grounding yourself in a financial plan as early as you can,” Assaf said.

Retirement rules of thumb

According to Fidelity, there are a few simple rules of thumb for retirement planning, such as saving 10 times your earnings by retirement age and the so-called 4% rule for retirement income, which suggests that retirees should be able to safely withdraw 4% of their investments, after adjusting for inflation, each year in retirement.
Other experts say there is no magic number for a retirement savings goal, but setting aside 15% of your yearly salary before taxes is a good place to start.
If your retirement date is still years away, “meet with an experienced financial advisor as soon as you can to evaluate your future income needs and put together a strategy sooner rather than later,” said Sun, a member of CNBC’s Financial Advisor Council. 
Alternatively, if your retirement date is soon, “make sure your emergency fund is funded, tighten your spending, look into establishing a HELOC [home equity line of credit] if you have equity in your home as an emergency line, look for ways to bring in supplemental income while you can, and importantly, meet with an advisor to make sure you have a full picture of retirement will look like for you,” Sun said. 

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A federal judge has granted a preliminary injunction to block the Department of Government Efficiency from further access to sensitive personal information at the Social Security Administration.
The order blocks the agency from granting DOGE access to systems containing personally identifiable information including Social Security numbers, medical records, mental health records, tax information and family court records.

A person holds a sign during a protest against cuts made by U.S. President Donald Trump’s administration to the Social Security Administration, in White Plains, New York, U.S., March 22, 2025. 
Nathan Layne | Reuters

A federal judge has once again blocked Department of Government Efficiency staffers, operating inside the Social Security Administration, from accessing sensitive personal data of millions of Americans.
U.S. District Judge Ellen Lipton Hollander on Thursday granted a preliminary injunction to block the so-called DOGE from further accessing sensitive personal data stored by the agency. As a result, DOGE will have to comply with certain legal requirements when accessing SSA data. The order applies specifically to SSA employees who are working on the DOGE agenda.

The lawsuit was brought by the American Federation of State, County, and Municipal Employees; the AFL-CIO; American Federation of Teachers and Alliance for Retired Americans.
They are represented by national legal organization Democracy Forward.
The plaintiffs argue DOGE’s actions violate the Privacy Act, Social Security Act, Internal Revenue Code and Administrative Procedure Act.
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Defendants in the case include the Social Security Administration; the agency’s acting commissioner Leland Dudek; SSA chief information officer Michael Russo and/or his successor; Elon Musk, senior advisor to the president, and DOGE acting administrator Amy Gleason.

The order blocks the agency and its agents and employees from granting access to systems containing personally identifiable information including Social Security numbers, medical records, mental health records, employer and employee payment records, employee earnings, addresses, bank records, tax information and family court records.
DOGE and its affiliates must also disgorge and delete all non-anonymized personally identifiable information in their possession or control since Jan. 20, according to the order. They are also prohibited from installing any software on Social Security Administration systems and must remove any software installed since Jan. 20, the order states. In addition, the defendants are blocked from accessing, altering or disclosing the agency’s computer or software code.  

“The court’s ruling sends a clear message: no one can bypass the law to raid government data systems for their own purposes,” said Skye Perryman, president and CEO of Democracy Forward, in a statement.
“We will continue working with our partners to ensure that DOGE’s overreach is permanently stopped and that people’s rights are protected,” Perryman said.
The injunction does allow DOGE staffers to access data that’s been redacted or stripped of anything personally identifiable, if they undergo training and background checks.
A temporary restraining order, which was issued by Hollander on March 20, is vacated and superseded with this order. The Trump administration had unsuccessfully appealed the temporary restraining order.
“We will appeal this decision and expect ultimate victory on the issue,” White House spokesperson Elizabeth Huston said in an email statement. “The American people gave President Trump a clear mandate to uproot waste, fraud, and abuse across the federal government. The Trump Administration will continue to fight to fulfill the mandate.”
The Social Security Administration did not respond to CNBC’s request for comment. More

The latest tariff-induced stock market volatility may be unsettling for investors who are approaching retirement.
Some 4.18 million Americans in 2025 are expected to reach age 65, more than any previous year, according to the Alliance for Lifetime Income.
But there are investing strategies to protect your portfolio, experts say.

Alistair Berg | Digitalvision | Getty Images

After the latest stock market volatility, many Americans are feeling stressed about the future of the U.S. economy and their finances.  
That uncertainty can be even more unsettling for near-retirees who are preparing to leave the workforce and tap portfolios for living expenses, experts say.

To that point, your first five years of retirement are the “danger zone” for tapping accounts during a downturn, according to Amy Arnott, a portfolio strategist with Morningstar Research Services.
If you take assets from accounts when the value is falling, “there’s less money left in the portfolio to benefit from an eventual rebound in the market,” she said. 
Some 4.18 million Americans in 2025 are projected to reach age 65, more than any previous year, according to a January report from the Alliance for Lifetime Income.  
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‘Protect your nest egg’

After several years of stock market growth, it’s important to “protect your nest egg” by rebalancing based on your risk tolerance and timeline, said CFP Jon Ulin, managing principal of Ulin & Co. Wealth Management in Boca Raton, Florida.
If you’re in your early 60s, you may shift assets closer to a 60/40 investment portfolio, which typically has 60% stocks and 40% bonds, he said.
However, that could include additional diversification, depending on your risk appetite and goals, experts say.
Alternatively, if you’re struggling with the latest market drawdowns, you may prefer a more conservative allocation, Baker said.
“This is a good time for a temperature check” to make sure your portfolio still matches your risk tolerance, he added.

Build your cash reserves

Typically, it’s best to avoid selling investments when the stock market is down, especially during the first few years of retirement, experts say.
The phenomenon, known as “sequence of returns risk,” shrinks your nest egg early, which hurts long-term portfolio growth when the market rebounds, research shows.
CFP Malcolm Ethridge, founder of Capital Area Planning Group in Washington, D.C., suggests keeping two years of income in cash within a couple of years of your planned retirement date.   
The strategy protects from early losses because retirees can tap cash reserves for living expenses while their portfolio recovers, he said.
There’s also a “psychological aspect” because the cash provides confidence to spend portfolio assets, which “sets the stage for the rest of retirement,” Ethridge said.

Consider a ‘bond ladder’

Amid bond market volatility, older investors may also consider building a bond ladder to provide portfolio income, said Alex Caswell, a San Francisco-based CFP at Wealth Script Advisors. 
This investment strategy involves purchasing a range of shorter-term Treasuries with staggered maturity dates, providing a steady income stream while managing interest rate risk, Caswell said.
For example, you may invest in Treasuries that mature every six months or one year for up to five years. Some investors also use the ladder method with certificates of deposit, he said.   
The maturing bonds or CDs offer “an extra layer of emotional comfort and stability for clients, especially those just entering retirement,” he said.    More

Pavlo Gonchar | SOPA Images | Lightrocket | Getty Images

Fears of a potential recession and anxiety over tariff policy are weighing on the markets, but dividend stocks can help steady investors’ portfolios.
Top Wall Street analysts help identify companies that can withstand short-term challenges and generate solid cash flows, allowing them to consistently pay solid dividends.

Here are three dividend-paying stocks, highlighted by Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.

Energy Transfer

Midstream energy company Energy Transfer (ET) is this week’s first dividend pick. The company has a diversified portfolio of energy assets in the U.S., with more than 130,000 miles of pipeline and related energy infrastructure.
In February, ET paid a quarterly cash distribution of $0.3250 per common unit, reflecting a 3.2% year-over-year increase. The stock offers a dividend yield of 7.5%.
Energy Transfer is scheduled to announce its first-quarter results on May 6. In her Q1 preview on the U.S. midstream sector, RBC Capital analyst Elvira Scotto named Energy Transfer as one of the companies she favors in this space. The analyst contends that the recent pullback in the stocks in RBC’s midstream coverage universe seems “overdone given the highly contracted and fee-based nature of midstream businesses.”
Scotto thinks that ET’s commentary about benefits from Waha price spreads (the price difference between natural gas traded at the Waha Hub in the Permian Basin and the benchmark Henry Hub price) could be one of the key drivers. She also expects ET stock to gain from any updates on potential data center/artificial intelligence-driven projects. The analyst added that management’s comments about export markets, mainly China, due to the trade war, will also impact investor sentiment.

The analyst is bullish on Energy Transfer due to its diversified cash flow streams across hydrocarbons and basins, including a significant amount of fee-based cash flow. Scotto expects ET’s cash flow growth, coupled with a solid balance sheet, to boost the cash returns to unit holders. She thinks that ET stock has an attractive valuation with limited downside. Overall, Scotto reaffirmed a buy rating on ET stock but slightly lowered the price target to $22 from $23 due to market uncertainty.
Scotto ranks No. 24 among more than 9,400 analysts tracked by TipRanks. Her ratings have been successful 67% of the time, delivering an average return of 18.1%. See Energy Transfer Ownership Structure on TipRanks.

The Williams Companies

Another midstream energy player that Scotto is bullish on is The Williams Companies (WMB). The company is set to announce its results for the first quarter of 2025 on May 5. Recently, WMB raised its dividend by 5.3% to $2.00 on an annualized basis for 2025. WMB offers a dividend yield of 3.4%.
Ahead of the Q1 results, Scotto listed several potential key drivers for WMB stock, including long-term AI/data center growth opportunities, dry gas basin activity, marketing segment results and the timing of growth projects coming online.
“We think investors favor WMB’s natural gas focused operations currently as the impact to natural gas demand is lower vs crude oil in a downturn given the underlying demand support from increasing LNG exports and AI/datacenters,” said Scotto.
Scotto reaffirmed a buy rating on WMB stock with a price target of $63. The analyst expects continued strong volumes across Williams’ segments, though some volume headwinds may persist in the Northeast segment. Scotto expects a solid quarter for WMB’s Sequent business due to weather-led storage opportunities.
Overall, Scotto is optimistic about WMB executing on its backlog of growth projects and bolstering its balance sheet. With a long-term horizon, the analyst expects Williams to remain comfortably within investment-grade credit metrics through her forecast period and keep its dividend intact. See Williams Technical Analysis on TipRanks.

Diamondback Energy

Diamondback Energy (FANG) is focused on the onshore oil and natural gas reserves in the Permian Basin. In February, the company announced an 11% hike in its annual base dividend to $4 per share. FANG offers a dividend yield of 4.5%.
Ahead of the company’s first-quarter results scheduled to be announced in early May, JPMorgan analyst Arun Jayaram reiterated a buy rating on FANG stock and slightly reduced the price target to $166 from $167. The analyst expects the company’s Q1 2025 results to be relatively in line with the Street’s estimates. Jayaram expects FANG to report Q1 cash flow per share (CFPS) of $8.12 compared to the Street’s estimates of $8.09.
Despite the volatility in commodity prices, Jayaram doesn’t expect any changes to FANG’s maintenance capital plan, at least in the near term, with operations continuing to be on track following the Double Eagle acquisition. The analyst also noted solid well productivity trends from Diamondback’s projects that turned-in-line in 2024, which should provide additional capital efficiency tailwinds.
Jayaram expects FANG to generate free cash flow (FCF) of about $1.4 billion, with cash returns comprising 90 cents per share in quarterly dividends and $437 million of share buybacks.
“FANG is a leader in capital efficiency among the E&Ps [exploration and production companies] and has one of the lowest FCF break-evens across the group,” the analyst said.
Jayaram ranks No. 943 among more than 9,400 analysts tracked by TipRanks. His ratings have been successful 49% of the time, delivering an average return of 6.2%. See Diamondback Energy Insider Trading on TipRanks. More

Americans may not be done grappling with high prices, with economic forecasts predicting higher inflation as Trump tariff policies go into effect.
Combined with slower economic growth and high unemployment, that could result in an economic condition known as stagflation, which the U.S. struggled with in the 1970s.
Here’s what experts say that means for your money.

David Espejo | Moment | Getty Images

Weary consumers, already grappling with high prices, now face an added potential risk: stagflation.
Stagflation — an economic term used to describe a combination of rising inflation, slower economic growth and high unemployment — may be on the horizon, according to economists.

“The Trump White House tariff policy has certainly increased the risk of both higher inflation and lower growth,” said Brett House, professor of professional practice in economics at Columbia Business School.
The Trump administration’s tariff policies are fueling stagflation conditions, according to the latest CNBC Rapid Update, which averages forecasts from 14 economists.
“It’s a more pronounced risk than at any time over the past 40 years,” said Greg Daco, chief economist at EY Parthenon and vice president at the National Association for Business Economics.
Uncertainty is already showing up in consumer confidence, said Diane Swonk, chief economist at KPMG.
“We’re seeing that kind of whiff of stagflation, where people are less secure about their jobs and they’re more worried about inflation down the road,” Swonk said.

What would stagflation mean in today’s economy?

Unidentified people line up with cans to buy gas at a Mobil gas station in Suffolk County, New York, in July 1979. In 1977 oil prices went up to more than $20 a barrel in response to increased demand and OPEC’s policy of limiting supply, which caused long lines at gas stations, and for the first time in history gasoline prices exceeded $1 a gallon.
Jim Pozarik | Hulton Archive | Getty Images

Stagflation was a major issue for the U.S. economy in the 1970s, when unemployment rates and inflation both rose as the country grappled with the costly Vietnam War and the loss of manufacturing jobs.
The 1970s-era stagflation is often associated with major oil price increases, leading to shortages and long lines at gas stations. However, some economists have argued it was actually monetary fluctuations that prompted stagflation.
The conditions prompted then Federal Reserve Chairman Paul Volcker to implement a dramatic tightening of monetary policy in the late ’70s and ’80s known as the “Volcker shock.” While inflation did come down as the Fed pushed interest rates higher, the central bank’s moves also prompted a severe recession — often defined as two consecutive quarters of negative gross domestic product growth — and higher than 10% unemployment.

Stagflation would not happen in the same way today, according to Dan Skelly, head of Morgan Stanley Wealth Management market research.
The U.S. is no longer at the whim of foreign oil, Skelly said. Moreover, unions, which prompted wage price spirals back then, are no longer as big a portion of the private work force today, he said.
The uncertainty around tariffs may affect corporate and consumer confidence, which would prompt spending and investment to slow, Skelly said. The likelihood of the growth slowdown part of stagflation is fairly high, he said.
However, Skelly said Morgan Stanley expects to see more effects in the stock market through earnings than in the economy.
Many firms are revising their economic forecasts, including the possibility of a recession, as a result of Trump administration policies, according to a new survey by Chief Executive.
Stagflation is not necessarily accompanied by a formal recession; rather, it can be slowing or stagnant growth, House said.
KPMG’s current forecast expects a shallow recession, with inflation peaking at the end of the third quarter.
“It’s not even what we saw during the pandemic,” Swonk said of the inflation spike. But it would be enough for employment to slow and to prompt a mild bout of stagflation, she said.
Stagflation, if it happens, would be the “worst of both worlds,” with higher unemployment and costs, Daco said.
“That represents a significant hardship for many families and businesses across the country,” he said.

How can you prepare for stagflation?

Athvisions | E+ | Getty Images

Americans may be facing a challenging economic period, with slower income growth, reduced employment prospects, higher unemployment and higher prices making it more difficult to stretch household budgets, according to House.
To prepare for stagflation, consumers would need to take all the steps they would in a recession as well as the steps they would take when prices are rising, said Sarah Foster, economic analyst at Bankrate.
As tariffs are expected to drive prices up, consumers may be tempted to buy ahead, even big-ticket items such as cars, laptops, smartphones or even homes.
Before making any such purchases, it’s important to make sure it’s in your budget, Foster said.
“It is absolutely wise right now to buy something that you know could be impacted by tariffs that you’ve already been budgeting for,” Foster said.
Yet consumers should be careful when it comes to “panic buying,” she said, or spending money to save money.
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Instead of overstretching their budgets with purchases, consumers should prioritize paying down high-interest credit card debt and building up an emergency fund. Focusing on high-interest debt first can save money in the long run, and having an emergency fund provides a financial safety net.
Experts generally recommend having at least six months’ expenses set aside. While it can be difficult to sock away extra money amid higher prices, the good news is higher interest rates are still providing inflation-beating returns on cash through online high-yield savings accounts that are FDIC-insured, Foster said.
For those who have been keeping cash on the sidelines rather than investing, now is the time to start allocating toward equities and riskier assets, considering the recent market drop, Skelly said.
“Don’t do it all in one day, but start winding down some of that cash, now that values are more fair than they were a month or two ago,” Skelly said.
Investors who have reaped big profits may want to rebalance to more neutral positions now, he said.

Can the economic forecast change?

Treasury Secretary Scott Bessent, rear left, and Commerce Secretary Howard Lutnick stand as President Donald Trump signs executive orders and proclamations in the Oval Office at the White House in Washington, April 9, 2025.
Nathan Howard | Reuters

There’s no guarantee stagflation will happen.
In 2022, one survey found 80% of economists said stagflation was a long-term risk.
But it was avoided at that time with a mix of strong economic growth, disinflation and a robust labor market encouraged by the Federal Reserve, Daco said.
Much of the risks popping up in today’s economic forecasts are the result of White House policies, economists say.
The Trump administration could reduce stagflation risks, Daco said, by reducing policy uncertainty, easing immigration restrictions that will reduce the labor supply, and not implementing tariffs on major trading partners.
House said the U.S. entered 2025 with a “well-performing economy,” which he said has been threatened by the Trump administration’s recent policy changes. It is up to the administration to unwind those policies and “prevent stagflation from occurring,” he said.
The White House did not respond to a request for comment from CNBC. More