Donald Trump has already destroyed much of the global economy, but the worst has yet to hit the United States. This “resilience paradox” is the result of early stage demand destruction, something economists fear and policy makers have no defense against. There are multiple factors holding the U.S. economy together in a way that other countries cannot manage. And most of the damage is baked in and irreversible. Thus far, one of the more powerful dynamics has been the market’s hesitation to bet long or short on price movement, because of the fluid and unpredictable nature of Trump’s on-again/off-again announcements regarding the war in Iran and the closure of the Strait of Hormuz. We dissect it all and lay out the scenarios ahead and what it means for the American consumer.

Resources

The Hill: Trump's sharp Iran reversal: Teases deal & cancels strikes after Kharg Island threats

RSMUS: American demand destruction: Seven channels that compound to threaten U.S. growth

CarEdge: The Auto Loan Crisis Just Hit a 32-Year Record: What It Means for Car Prices

McKinsey: An update on US consumer sentiment: Gloomier outlook ahead of sunnier days

Bloomberg: Why Oil’s Not at $200 After the Biggest Supply Shock in History

Autoweek: U.S. Auto Sales On Track for 2.6 Percent Drop in 2026 as War and Tariffs Cloud Outlook

BLS: CPI Data

MacroMicro: US - Housing Price Index vs. Rent Inflation

BLS: Real Earnings Summary - 2026 M05 Results

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