Here's something remarkable: Americans are more anxious about the economy right now than they were when Lehman Brothers collapsed or when the entire country locked down during a global pandemic. And according to economist Justin Wolfers, the culprit isn't a traditional crisis—it's what he calls unprecedented "policy chaos" coming straight from the White House.

When Confidence Hits Rock Bottom

President Donald Trump keeps insisting the economy is "BOOMING" and that Americans "have never had it better," but consumer sentiment data tells a strikingly different story. Consumer confidence has tumbled to its lowest point in measured history, dropping for five straight months through December 2025 according to the US Consumer Confidence Board.

Wolfers doesn't mince words in his recent interview: "This doesn't feel like a White House that's running a coherent, well-thought-out economic policy."

The problem, as Wolfers sees it, is that policy chaos itself becomes an economic variable. When leadership zigzags—imposing tariffs one day, reversing them the next, rattling sabers constantly—uncertainty freezes decision-making. Businesses hold off on hiring. Households postpone buying cars or homes. The economy slows not because of fundamentals, but because no one knows what's coming next.

Attacking the Referees

The real trouble started when the administration began targeting nonpartisan economic institutions. In August 2025, Trump fired Bureau of Labor Statistics Commissioner Dr. Erika McEntarfer, accusing her of "faking the Jobs Numbers" to help his political opponents.

McEntarfer has since warned that politicizing economic data is a "dangerous step," comparing it to "messing with the traffic lights." When you can't trust the numbers, you're essentially driving the economy blind.

The Fed Fight Heats Up

Then there's the Federal Reserve situation. Wolfers warns that Fed Chair Jerome Powell is now "going to war" to protect the central bank's independence from administration attacks. The Justice Department has reportedly been targeting the Fed, which Wolfers sarcastically dubs the "Department of Recriminations."

The White House appears intent on criminalizing independent public service, Wolfers argues. His concern? That the Federal Reserve could become a "Federal Subserve"—a political tool rather than an independent guardian of monetary stability. In that world, "no one knows tomorrow's news" and economic stability gets held hostage by political whims.

Market Performance Reflects Uncertainty

The uncertainty shows up in market performance too. Through 2026 so far, the Nasdaq 100 has slipped 0.23%, while the S&P 500 and Dow Jones have managed gains of 0.70% and 2.17% respectively. Tech stocks, it seems, are bearing the brunt of the anxiety.

On Wednesday, both the SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ) closed lower. SPY dropped 0.49% to $690.36, while QQQ fell 1.07% to $619.55. Futures were trading mixed on Thursday.

When consumer confidence hits historic lows while the president tweets about boom times, something fundamental has disconnected. And according to Wolfers, that something is trust—in the data, in the institutions, and in the predictability that markets desperately need to function.