The US economy contracted by 0.3% annualized in Q1 2025, marking the first quarterly decline since 2022. This decline is attributed to increased imports and reduced consumer and government spending, indicating a preemptive adjustment to anticipated aggressive trade policies. President Trump noted this decline occurred during a period of stock market volatility, with the S&P 500 and Nasdaq Composite experiencing significant drops, attributing the situation to Biden's administration. Analysts were expecting a GDP growth of 0.4%, and reactions in the market included falling stocks and rising Treasury yields and gold prices. The surge in imports, notably more than 41%, and a 50% rise in goods imports suggest businesses were stockpiling ahead of expected tariffs. The Conference Board's consumer confidence index also fell to its lowest level since 2020, which adds to a growing sense of economic pessimism. Investors are now looking for indications that trade agreements are being finalized with other countries.

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