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Economist Says Fed Warning Shows Trump Driving US Economy 'Toward Disaster'
"Launching chaotic trade wars with our allies and gutting Social Security, Medicaid, and other vital programs in order to fund tax breaks for his billionaire donors isn't making life more affordable for working-class families."
Mar 19, 2025
A former Obama administration economic adviser said Wednesday that the Federal Reserve's forecast of increased unemployment, accelerating inflation, and slower growth driven by President Donald Trump's economic policies could portend a return of the "stagflation" that plagued the nation in the 1970s.
The Federal Open Markets Committee, which sets U.S. monetary policy, downgraded its economic outlook for 2025 from an initial projection of 2.1% growth to 1.7%. FOMC also revised its inflation forecast upward from 2.5% to 2.8%.
While FOMC said that "recent indicators suggest that economic activity has continued to expand at a solid pace," the committee noted that "uncertainty around the economic outlook has increased."
Fears of an economic slowdown or even a recession have increased dramatically since Trump took office and imposed tariffs on some of the nation's biggest trade partners while moving to gut critical social programs in order to fund a $4.5 trillion tax cut that will overwhelmingly benefit wealthy Americans.
"Inflation has started to move up now. We think partly in response to tariffs and there may be a delay in further progress over the course of this year," Federal Reserve Chair Jerome Powell said during a Wednesday news conference, at which he said interest rates will remain unchanged. "The survey data [of] both household and businesses show significant large rising uncertainty and significant concerns about downside risks."
The economic justice group Groundwork Collaborative said the FOMC projections show that "Trump is steering our economy toward disaster," while warning of the possible return of stagflation, a combination of low or negative economic growth and inflation.
Alex Jacquez, the chief of policy and advocacy at the Groundwork Collaborative and a former adviser at the White House National Economic Council during the Obama administration, said in a statement that "the Federal Reserve's projections confirm what millions of Americans are already thinking: President Trump is steering our economy toward disaster."
"Voters elected President Trump to lower the cost of living, and instead, they continue to be saddled with persistently high inflation and interest rates," Jacquez continued. "Launching chaotic trade wars with our allies and gutting Social Security, Medicaid, and other vital programs in order to fund tax breaks for his billionaire donors isn't making life more affordable for working-class families. It is, however, a perfect recipe for stagflation."
Trump's economic policies—which some observers believe could be designed to deliberately tank the economy so that the ultrawealthy can buy up assets at deep discounts—have sent consumer confidence plummeting. Meanwhile, recent polls have revealed that a majority of voters disapprove of Trump's handling of the economy and inflation.
The latest FOMC forecast came as the world braces for yet another escalation of Trump's trade war, with the president threatening to implement worldwide reciprocal tariffs starting April 2.
The Organization for Economic Cooperation and Development (OECD) said Monday that Trump's trade war is likely to slow economic growth in the United States and around the world.
"The global economy has shown some real resilience, with growth remaining steady and inflation moving downwards," OECD Secretary-General Mathias Cormann said. "However, some signs of weakness have emerged, driven by heightened policy uncertainty."
"Increasing trade restrictions will contribute to higher costs both for production and consumption," Cormann added. "It remains essential to ensure a well-functioning, rules-based international trading system and to keep markets open."
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Biden Must Act Now to End US Funds for Fossil Fuels Abroad
With an incoming Trump administration ready to bend to the will of the fossil fuel industry, the Biden administration cannot afford to miss this opportunity to secure its climate legacy.
Nov 14, 2024
The Biden administration is running out of time to fulfill its promises to stop using U.S. taxpayer dollars to finance fossil fuel projects overseas. And, as Donald Trump is about to assume the presidency, this is one of the final chances for President Joe Biden to cement his climate legacy.
On November 18, member countries of the Organization for Economic Co-operation and Development (OECD) will meet to consider a proposal to end support from export credit agencies (ECAs) for fossil fuels. This proposal not only has the ability to change the course of the climate crisis by shifting $41 billion USD per year globally out of oil and gas, but is the final opportunity for the outgoing Biden administration to fulfill its pledges made through the Clean Energy Transition Partnership, the International Climate Finance Plan, Executive Order on the Climate Crisis, and via G7 statements in 2022 and 2024.
Since May of 2023, the U.S. Export-Import Bank (EXIM)—our country’s ECA—has approved $2.2 billion in new oil-, gas-, and coal-related projects overseas, including a $500 million loan for an oil and gas drilling project in Bahrain. Additionally, EXIM is considering financing dangerous projects like Mozambique LNG and Papua LNG. With a recent report finding that EXIM was considering financing international fossil fuel projects with lifetime emissions equivalent to roughly 80% of the annual fossil fuel carbon dioxide-equivalent output of the entire United States (or 1,300 coal-fired power plants), this proposal is a critical action President Biden can still take to reduce harmful emissions, stop EXIM from financing dangerous fossil fuel projects abroad, and follow through on his commitments.
President Biden’s reputation as our country’s most pro-climate president is on the line.
The climate crisis has reached a critical point, and it’s unconscionable to keep funneling taxpayer dollars into reckless fossil fuel projects overseas. We are already paying the price for this ongoing investment in fossil fuels—facing record-breaking floods, devastating storms, and deadly extreme weather. The escalating severity of these climate disasters must be a wake-up call our leaders can no longer ignore: Taxpayer financing for overseas fossil fuel projects must end now. And, the support for this climate action is strong: Over 250 civil society organizations have called on OECD member states to end public oil and gas funding.
OECD member states as a whole send $41 billion annually to fossil fuel projects despite the blatant need for a swift transition to clean energy, and the Biden administration’s failure to put forward a position—despite pledging to do this numerous times—has led to deadlock and inaction. The billions of dollars per year that EXIM provides for fossil fuels could be shifted away from fossil fuels to renewable energy projects and be presented as part of a climate finance package at COP29. With the clock ticking for his administration, President Biden must agree to end public financing of foreign fossil fuels via EXIM, follow through on past commitments, and show global climate leadership at COP29 and beyond.
As one of the world’s largest emitters, the United States must use this opportunity to reach our global clean energy agreements and hold ourselves and the rest of the international community accountable for keeping goals such as 1.5°C alive. This meeting is a chance for redemption, to set a global example, and to allow the Biden administration to keep its promise from Glasgow. Taking advantage of this moment will ensure that the progress made over the past four years cannot be undone, will help reduce global emissions, and will help at home by safeguarding tax dollars and fortifying the Biden administration’s record of protecting communities from the climate crisis.
President Biden’s reputation as our country’s most pro-climate president is on the line. With an incoming Trump administration ready to bend to the will of the fossil fuel industry, the Biden administration cannot afford to miss this opportunity to commit the United States to ending taxpayer funding for fossil fuel projects abroad. This decision should not be a difficult one—and we hope that the Biden administration agrees to put communities both here and abroad and the climate over fossil fuel industry interests.
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Biden Must Stop Protecting Fossil Fuel Profits Over People and the Planet
President Biden’s approach to the climate crisis is nothing short of hypocritical. While the president’s rhetoric aligns with global climate promises, his administration has approved massive fossil fuel projects.
Jul 31, 2023
Ahead of its Climate Ambition Summit in September, the United Nations is calling on global leaders to phase out fossil fuels. U.S. President Joe Biden is painfully falling behind on this agenda and must urgently get back on track to maintain any credibility in these climate discussions.
As we suffer through extreme heat in the U.S. and across the globe, President Biden has been protecting fossil fuel profits instead of people. From the Willow Project in Alaska to Gulf LNG exports, Biden props up dangerous oil and gas projects and the corporations that value their bottom line over our future. It has to stop.
The latest reports from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) show that maintaining a 50% chance of limiting global warming to 1.5°C (2.7°F) requires an immediate end to investments in new coal, oil, and gas production and hazardous liquified fossil gas (LNG) infrastructure.
Of all countries in the world, the United States is the world’s top oil and gas producer and exporter, and is planning the largest expansion in oil and gas production over the next decade.
These findings remain unchanged in the context of the war in Ukraine and its impact on global energy markets, and as last year’s World Energy Outlook said: “No one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero emissions by 2050.”
President Biden’s approach to the climate crisis is nothing short of hypocritical. While the president’s rhetoric aligns with global climate promises, his administration has approved massive fossil fuel projects.
Of all countries in the world, the United States is the world’s top oil and gas producer and exporter, and is planning the largest expansion in oil and gas production over the next decade. This year alone, Biden approved the Willow oil project in Alaska and multiple LNG export facilities, and his administration put its support behind the Mountain Valley fracked gas pipeline, skipping important permitting processes meant to protect people and the environment, betraying communities and his voters.
President Biden has even backed policies that gut bedrock environmental laws that protect communities from fossil fuel pollution.
At the United Nations COP26 climate summit in Glasgow, President Biden joined 38 other countries and financial institutions in promising to end international public finance for fossil fuels by the end of 2022 and to instead prioritize public finance for clean energy. At the G7 leader’s summit in 2021, a near-identical commitment was adopted, bringing Japan, one of the world’s largest fossil financiers, onboard, and this year the G7 committed to report on progress by the end of 2023. If the United States followed through on its promise, they could shift $3.7 billion annually out of fossil fuels on average, increasing their international renewable energy public finance by five times.
But instead of keeping its commitment, the Biden administration continues to approve new public funding for fossil fuel expansion abroad. While Canada, the United Kingdom, and France have published policies keeping their promises to stop international funding for fossil fuels, the United States has refused to publish a policy.
In May, the Biden administration approved almost $100 million in export finance for expanding an Indonesian oil refinery, neglecting the agreed end of 2022 deadline for ending such support. Just a month ago, the U.S. development finance corporation (DFC) pledged half a billion dollars to support LNG imports in Poland and gas infrastructure in South Africa. Most recently in July, the Export-Import Bank of the United States (EXIM)—the official export credit agency of the U.S.—insured $400 million in revolving credit facilities for global commodities trader Trafigura, allowing them to purchase LNG from U.S. exporters to sell primarily to European buyers. And more is on the docket—the United States is currently considering export finance for a controversial LNG project in Papua New Guinea.
Voters will not ignore Biden’s disastrous climate track record unless he starts keeping his climate promises and paves the way for a cleaner, safer, and more equitable future with cheaper energy bills and good jobs.
The U.S. breaking its promise is particularly unhelpful now that a huge diplomatic opportunity is opening up to advance oil and gas export finance restrictions at the Organisation for Economic Co-operation and Development (OECD).
More than half of OECD countries, including the United States, signed onto the COP26 commitment to end international public finance for fossil fuels, creating strong foundations for a progressive member to table a proposal for oil and gas restrictions and kick off negotiations on the topic. This is an urgent matter. OECD members still provide $41 billion annually in export support to fossil fuel projects, five times their clean energy support.
Ironically, the United States was the country championing efforts to secure OECD coal finance restrictions back in 2015. Now it risks being an obstacle rather than a leader at the OECD.
At a time when we must rapidly and equitably phase out fossil fuels, it is alarming to see Biden consistently breaking their climate commitments and pushing for the global expansion of LNG and oil, as well as holding back progress at the UNSG Climate Ambition Summit and the OECD. Every new fossil fuel project is incompatible with a liveable future.
As the world’s biggest historic polluter, the United States has a responsibility to lead a global just transition away from fossil fuels. Biden can make the choice to lead this moment and succeed. Voters will not ignore Biden’s disastrous climate track record unless he starts keeping his climate promises and paves the way for a cleaner, safer, and more equitable future with cheaper energy bills and good jobs.
We call on President Biden to fulfill his duty to the American people, the international community, and communities whose lives and well-being are impacted by the dirty fossil fuel projects he has been backing. On Sunday, September 17 people will be marching through New York City with these demands at the UNSG Climate Ambition Summit. It’s time for Biden to listen to our voices and end the era of fossil fuels.
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