“I didn’t take over until January 20th. Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers. Our Country will boom, but we have to get rid of the Biden ‘Overhang.’ This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!”
That was President Donald Trump’s reaction on Truth Social on April 30 to the latest data from the Bureau of Economic Analysis showing a slight 0.3 percent, annualized decrease of the Gross Domestic Product in the first quarter of 2025 that ended on March 31 prior to the President’s April 2 announcement of reciprocal tariffs.
Here, Trump is suggesting that there is a “Biden overhang” in the economy. He’s got a point.
Under former President Joe Biden, the U.S. economy saw peak inflation at 9.1 percent in June 2022, and subsequent, unsurprising increase of unemployment from 5.7 million in January 2023 to 7 million now, a 1.3 million increase.
The first signals of a slowdown or recession came in 2022 when the spread between 10-year and 2-year treasuries first inverted, and then the signal for higher unemployment came in 2023 when the inversion began narrowing until the yield curve normalized in 2024.
That’s what usually happens following peak inflation given the historical inverse relationship between inflation and unemployment. In fact, every bout of peak inflation in the postwar era either coincided with or was followed by a recession, the unexpected 2020 Covid recession notwithstanding that came a result of artificial economic lockdowns, not the economy overheating.
In the current instance, the American people are also seeing consumer credit owned and securitized contracting. The good news is that usually happens at the tail end or following a recession, and so it could be that the contraction or slowdown already being experienced simply has not been fully booked by the Bureau of Economic Research (NBER).
Regardless of the NBER’s timing, the increase in unemployment we’ve seen for the past two years, along with slowing inflation is real enough.
Interest rates are dropping, with 10-year treasuries down to 4.18 percent as of this writing amid a flight to safety as the dollar strengthens. Oil is trading down to $59.53 and so too are other commodities dropping. All of this projects not just lower inflation expectations, but lower growth expectations on the horizon.
So, the U.S. economy could be in for a bumpy ride in the near-term. But as President Trump stated, “This will take a while…” but that after that, “when the boom begins, it will be like no other.”
Meaning the best days are yet to come. Congress is still working on President Trump’s historic tax cut package that will include no tax on tips, overtime and Social Security, as well as factory expensing to fully incentivize companies to make good on the trillions of dollars of commitments to make their products in America and to shift away from China.
And as far as the reciprocal tariffs go with other trade partners, the U.S. is in the heart of trade negotiations with South Korea, India and Japan, with some deals expected soon that could dramatically alter the outlook.
At his April 29 rally celebrating his first 100 days in office in Warren, Michigan — a state he carried twice in 2016 and 2024 — Trump promised that his historic trade policies would put America first: “After decades of politicians who destroyed Detroit to build up Beijing, you finally have a champion for workers in the White House. And instead of putting China first, I’m putting Michigan first. And I’m putting America first.”
Trump added that the bureaucrats who had overseen the outsourcing of America were being fired, “After a lifetime of unelected bureaucrats stealing your paychecks, attacking your values, and trampling your freedoms, we are stopping their gravy train, ending their power trip, and telling thousands of corrupt, incompetent, and unnecessary deep state bureaucrats, ‘You’re fired. Get the hell out of here. You’re fired. Get out of here.’ In 100 days, we have delivered the most profound change in Washington in nearly 100 years.”
In the meantime, the President continues to make historic gains in securing the southern border, with his plan to militarize the border with U.S. troops paying handsome dividends, as border encounters are down their lowest levels ever recorded, with just 11,017 such encounters in March compared to March 2024’s 189,359, a 94 percent decrease.
President Trump does not have to worry about facing reelection in 2028, meaning he can take the bold actions that he campaigned on — promises made, promises kept — that he believes in the long-term will position the U.S. to be stronger and more prosperous. His message to his supporters is to “BE PATIENT!!!” In 2024, the American people took another chance on Trump, and the President is promising that the best is yet to come. Stay tuned.
Robert Romano is the Executive Director at Americans for Limited Government Foundation.
