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    What Is a Bear Market? Are We in One?

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    President Trump’s global tariffs have sent stock markets worldwide into a tailspin, and the S&P 500 on Monday briefly entered bear market territory for the first time since 2022.Mr. Trump has seemed unmoved by the decline. He signaled on Monday that he had no plans to back off on tariffs, insisting that they would bring in “billions of dollars” in revenue and that other countries had been “abusing” the United States with their trade policies.Here is what to know about a bear market.What is a bear market?A bear market is a Wall Street term for a sustained market downturn, when a stock index closes 20 percent from its last peak.The 20 percent threshold signals investor pessimism about the future of the economy.Are we in a bear market now?The S&P 500, the benchmark U.S. stock index, opened lower on Monday. The index was already down 17.4 percent from its last high, on Feb. 19, and if it closes Monday’s trading with a loss of at least 3.1 percent, that would tip it into a bear market. More

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    The Job Market Has Been Resilient. The Trade War Could Be Its Undoing.

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    For three years, the U.S. economy has been buffeted by rapid inflation, high interest rates and political instability at home and abroad. Yet it has proved surprisingly resilient, supported by the sturdy pillars of robust consumer spending, a rising stock market, and healthy balance sheets for households and businesses alike.But one by one, those pillars have begun to crack under the weight of tariffs and uncertainty. The all-out global trade war that President Trump declared on Wednesday could be enough to shatter what had arguably been the economy’s final source of support, the strong job market.“The strength of the consumer is coming down to the jobs market,” said Sarah House, an economist at Wells Fargo. “And it’s increasingly perilous.”The sweeping tariffs that Mr. Trump announced on Wednesday, and the duties that U.S. trading partners quickly imposed in retaliation, sent stock indexes around the world tumbling on Thursday. The effects won’t be limited to the financial markets: Economists say tariffs will raise prices for consumers and businesses, which will lead employers to pull back on hiring and, if the tariffs remain in place long enough, lay off workers.“If the economy isn’t growing as fast, or it isn’t growing at all, you don’t need as many workers,” Ms. House said.Economists will get their latest glimpse of the job situation on Friday, when the Bureau of Labor Statistics will release March figures on hiring and unemployment.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Global Trade War Makes the Fed’s Task Tougher

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    Until a few months ago, the Federal Reserve appeared close to achieving something that many doubted was possible. The economy looked on the cusp of a “soft landing,” a situation where inflation was headed back to the central bank’s 2 percent target without a recession. That put the central bank on track to steadily lower interest rates until borrowing costs reached a level that neither revved up growth nor slowed it down.President Trump’s global trade war has thrown a wrench in those plans. Facing extreme uncertainty about the economic outlook, the central bank has put further interest rate cuts on hold until it has a better sense of how tariffs will affect the economy.What policymakers are trying to sort out is whether they should be more concerned about the hit to growth that is expected from these levies or the probable boost to consumer prices. The “nightmare scenario,” according to Donald Kohn, the former vice chair of the Fed, is one in which inflation rises at the same time that the economy falters, a combination that carries the whiff of stagflation.Making that assessment is by no means a straightforward exercise. Much will depend on how long the tariffs are in place, how other countries retaliate, and how consumers and businesses adapt. Officials are also keeping close tabs on other aspects of the Trump administration’s economic agenda, including steep government spending cuts, immigration restrictions and deregulation. Tax cuts are also on the docket, but because those require congressional approval, their timing and scope remain unclear.At this stage, the economic data presents a mixed picture. Growth in the final quarter of last year was solid and the labor market has yet to show real signs of weakness. The unemployment rate, at 4.1 percent, remains historically low and layoffs have yet to rise in a material way.Most Americans do not expect this to last. According to recent sentiment surveys, the mood has significantly soured on the outlook because of Mr. Trump’s policies. Consumers now expect slower growth, higher unemployment and resurgent inflation.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Inflation Remained Sticky Ahead of Trump’s Escalating Trade War

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    The Federal Reserve’s preferred inflation measure showed underlying price pressures persisting in February.Americans hoping for some relief on inflation suffered a setback in February, as new data showed underlying price pressures intensifying even before the latest escalation in President Trump’s trade war.The Personal Consumption Expenditures price index, after stripping out volatile food and energy items, climbed 2.8 percent in February from a year earlier, outpacing January’s annual pace. On a monthly basis, these prices ticked up another 0.4 percent, higher than the monthly increase in January.Overall inflation came in at 2.5 percent, a level that sits well above the Federal Reserve’s 2 percent target and has been more or less in place since November.The latest data from the Commerce Department highlights the extent of the challenge the central bank is confronting. Its debate over what to do about interest rates has been complicated by a rapidly escalating trade war, one that has bred extreme uncertainty about the economic outlook.On Wednesday, Mr. Trump announced 25 percent tariffs on cars and car parts imported into the United States and has vowed to unveil another set of tariffs next week.With the scope and scale of the tariffs not yet clear, and a host of other policies pertaining to immigration, taxes and deregulation still being worked out, the Fed has opted to stand pat until it gets more clarity about what exactly Mr. Trump will enforce and how consumers and businesses will respond.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Fed Holds Interest Rates Steady, but Trump’s Tariffs Could Slow Inflation Progress

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    The Federal Reserve left interest rates unchanged on Wednesday for a second straight meeting. The March meeting was the central bank’s most direct acknowledgment to date that President Trump’s policies are set to have a real impact on the economy, stoking significant uncertainty about where inflation, growth and — ultimately — interest rates are headed. Here are the takeaways:Tariffs took center stage during the news conference with Jerome H. Powell. The Fed chair went as far as saying that tariffs likely mean “further progress may be delayed” on getting inflation back to the central bank’s 2 percent target. That recognition materialized in the higher inflation forecasts that officials penciled into new economic projections. By the end of the year, officials estimate that core inflation, which strips out volatile food and energy prices, will stay stuck at 2.8 percent, before declining to 2.2 percent in 2027.Fed officials paired their higher inflation forecast with lower estimates for economic growth, even as they stuck with previous projections that they would be able to lower interest rates by a half point this year, delivering two quarter-point cuts. The range of possible outcomes was wide, however, with eight policymakers forecasting either no additional cuts or just one this year. Only two thought the Fed would lower rates by 0.75 percentage points, or three cuts of a quarter point this year.In recent months, Mr. Powell has been adamant that the Fed is well positioned to respond to sharp shifts in the trajectory for the economy and could afford to be patient about making rate decisions given the solid foundation of the labor market. He reiterated that point, pushing back on the souring of consumer expectations about inflation and economy that has shown up in recent survey data.While the path forward for interest rates and the economy was the main focus of the March meeting, the Fed’s decision to slow the pace at which it is reducing its balance sheet drew some attention. Mr. Powell said the idea was to reduce the possibility of market ructions in funding markets. More

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    How Fed Rates Influence Mortgages, Credit Cards, Savings and More

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    The Federal Reserve is expected to keep its key rate steady on Wednesday, after a series of cuts that lowered rates by a full percentage point last year.That means consumers looking to borrow are likely to have to wait a bit longer for better deals on many loans, but savers will benefit from steadier yields on savings accounts.Economists don’t expect another rate cut for a while, as the central bank waits for more clarity on an increasingly uncertain outlook given President Trump’s policies on tariffs, immigration, widespread federal job cuts, among other things.The Fed’s benchmark rate is set at a range of 4.25 to 4.5 percent. In an effort to tamp down sky-high inflation, the central bank began lifting rates rapidly — from near zero to above 5 percent — between March 2022 and July 2023. Prices have cooled considerably since then, and the Fed pivoted to rate cuts, lowering rates in September, November and December.More recently,Mr. Trump’s inflation-stoking polices could prompt the Fed to delay more rate cuts. But at the same time, longer-term interest rates set by the markets have been drifting down, influencing a wide range of consumer and business borrowing costs.Here’s what to watch for in five areas of your financial life:Auto RatesCredit CardsMortgagesSavings Accounts and C.D.sStudent LoansWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    The Fed’s Projections: How to Read Them Like a Pro

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    Federal Reserve officials are scheduled to release their first set of economic projections this year, alongside their interest rate decision, on Wednesday. Those forecasts will offer a fresh glimpse of the trajectory for monetary policy at a highly uncertain moment for the central bank.Policymakers paused interest rate cuts in January after reducing borrowing costs by a percentage point in the latter half of last year. They are expected to again stand pat on Wednesday as they await greater clarity on how far President Trump will push his global trade war and to what extent he will follow through on other central aspects of his agenda, including slashing government spending and deporting migrants.The big question now is when — and to some extent whether — the Fed will be able to restart cuts this year.When the Fed last released quarterly economic projections in December, officials penciled in two rate cuts that would reduce borrowing costs by half a percentage point in 2025. But economists now expect Mr. Trump’s policies to lead to more intense price pressures and slower growth, a tough dynamic for the central bank and one that could prompt policymakers to scale back how many cuts they project going forward.Here’s what could change and how to interpret those updates.The dot plot, decodedWhen the central bank releases its Summary of Economic Projections each quarter, Fed watchers focus on one part in particular: the dot plot.The dot plot will show Fed policymakers’ estimates for interest rates through 2027 and over the longer run. The forecasts are represented by dots arranged along a vertical scale — one dot for each of the central bank’s 19 officials.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More