This story was originally published on CFO Dive . To receive daily news and insights, subscribe to our free daily CFO Dive newsletter .

Dive Brief:

Dive Insight:

T he survey ended April 8, a day before President Donald Trump announced a 90-day pause on reciprocal tariffs targeting virtually all U.S. trading partners. Trump maintained reciprocal tariffs on imports from China and 10% baseline tariffs on dozens of countries announced early this month.

Since Trump’s pause, however, the trade war between the world’s two largest economies has escalated. The U.S. has said cumulative tariffs on imports from China totaled 145%, prompting Beijing on Friday to retaliate by raising duties on all U.S. imports to 125%.

JPMorgan Chase CEO Jamie Dimon on Friday warned of potential harm to the U.S. from world trade conflict and other upheaval.

“The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and ‘trade wars,’ ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility,” Dimon said in a report on JPMorgan’s first quarter earnings .

Consumers expect inflation during the coming year to heat up to 6.7%, 1.7 percentage points higher than last month, according to the University of Michigan. Their long-run inflation expectations rose to 4.4% this month from 4.1% in March.

“During times of turbulence and uncertainty such as these, well-anchored inflation expectations are critically important for ensuring sustained price stability,” New York Federal Reserve Bank President John Williams said in a speech Friday. The central bank seeks to hold inflation at 2%.

Tariffs will stoke inflation this year to between 3.5% and 4%, Williams predicted.

Given “the slowdown in labor force growth due to reduced immigration and the combined effects of uncertainty and tariffs,” gross domestic product growth during the coming year will likely slow to below 1%, he said.

Also, unemployment will probably rise from the current 4.2% level to between 4.5% and 5%, according to Williams, who serves as vice chair of the policymaking Federal Open Market Committee.

A “pervasive sense of uncertainty is becoming increasingly evident,” he said. “There’s been a sharp decline in consumer sentiment, and business sentiment measures have weakened too.”

“ At times of great uncertainty, consumers may put off making big decisions like buying a home or car, and businesses may delay investing until they have a better sense of what the future holds,” Williams said. “And when households and businesses cut back on spending, economic growth slows.”

Yet falling consumer sentiment does not necessarily herald a pullback in spending, according to Wells Fargo economists.

“Lower optimism isn’t a positive development for actual spending, but it alone won’t drive households into hiding,” they said in a report Friday.

Since the pandemic, consumers have belied metrics signaling depressed optimism and kept on spending, the economists said. “The U.S. consumer has proved remarkably resilient in recent years.”