This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every morning for a chart of the day, economic data releases, and more.
If the knock against the Biden administration was that it was at fault for dismissing the bad vibes — the way many Americans felt about the economy — while pointing stubbornly to good data, what happens when the next administration dismisses both the bad vibes and the bad data ?
How the current White House talks about the economy is like a funhouse mirror of the "vibecession" we saw in the last few years. Under the last president, people perceived the economy to be in worse shape than the data suggested. Now, the economic data is flashing weakness and consumers are feeling worse. But in recent interviews Trump administration officials have minimized the vibes and the data.
“Our Administration and the American people are focused on the real economy, not fake news polling or ‘vibecessions,’" said Treasury Secretary Scott Bessent in a post on X .
Bessent isn’t wrong to say that. Data is critical. But the mood is far from unimportant — just ask Fed Chair Jerome Powell, whose mandate to keep prices stable relies in part on Americans' expectations and their trust in the government to keep the economy stable. And it makes sense, as mood affects spending and hiring decisions.
“We’ve been in for eight weeks,” Bessent said on Sunday in an interview on NBC’s “ Meet the Press ."
“We are putting the policies in place that will make the affordability crisis go down, inflation moderate, and as we set the sails, I am confident that the American people will come our way even if some of the media narrative doesn’t," he continued.
But the warning signs in the "media narrative" aren't coming from the finance media. It's corporations raising the alarm. It’s the market plunging into correction territory . It’s the data showing the prospect for weaker growth and higher inflation . It’s the surveys of actual people participating in the economy that are reflecting a souring mood and a darker outlook. This is not academic complaining — this is money talking.
The Trump administration says its economic agenda is unfolding according to plan, with the fruits of today's blood, sweat, and tears to come. And many will give the White House the benefit of the doubt in the first 100 days of Trump 2.0. But Bessent and the rest of the Trump administration can wave off these vibes and data as irrelevant at their own peril. Or, rather, everybody's peril.
On Monday, RBC Capital Markets followed Goldman Sachs and Yardeni Research to become the latest Wall Street shop to lower its S&P 500 year-end target , citing economic growth concerns.
And on Wednesday the Fed will come one step closer to showing signs of how the president's policies are changing the central bank’s expectations for the economy .
All the while, it’s not clear how to measure the success of White House policies if the value of indicators is ignored and negative perceptions are rejected. If it's short-term tariff pain for long-term economic gain, as the White House has framed it, the final accounting may be a challenge.
Under winning conditions, setting the economic outlook by fiat might pass muster. But not when the market, for now, is the opposite.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban .
