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The first two months of President Trump’s new administration have been a whirlwind of policy changes. Just this week, for example, broad-based tariffs on Mexico and Canada were enacted and subsequently revoked in just 48 hours. These abrupt changes, on top of the wide-reaching efforts by the Department of Government Efficiency (DOGE) to reduce the federal workforce, are causing a sharp increase in economic uncertainty.
Economists at the Federal Reserve Board have constructed an index to measure this uncertainty in real-time by analyzing sentiment in newspapers, earnings calls, and tariff rates. It’s at an all-time high, reflecting the widespread ambiguity