US EconomyJan. 01, 2026 4:05 PM ETS&P 500 Futures (SPX), SP500, DJI, NDX, RTY, SPY, DIA, QQQ, IWM, IVV, VOOAFMC, AFSM, ARKK, AVUV, BAPR, IVOO, IVOV, IVW, IWC, IWN, IWO, IWP, IWR, IWS, IYY, SPLV, SPMD, SPMO, SPMV, SPSM, SPUS, SPUU, SPVM, SPVU, SPXE, SPXL, SPXN, SPXS, SPXT, SPXU, SPXV, SPYD, SPYG, SPYV, SPYX, SQLV, SSO, SSPY, SVAL, SYLD, TMDV, TPHD, TPLC, TPSC, UAUG, UJAN, UMAR, UMAY, UOCT, UPRO, USMC, USMF, USVM, MAGSJeffrey Frankel478 FollowersComment(1)The tariffs proclaimed by Trump in 2025 were substantially worse than most expectations. The implication was sure to be large adverse effects on inflation, employment, and real income.Yet, the reality turned out not as bad as many economists expected, given the magnitude of the tariffs announced. There was not quite as much retaliation by trading partners as one might have feared.Are most of the economic effects that were expected in 2025 now due to hit in 2026 instead?Getty ImagesAs Donald Trump took office last January, most economists worried that he might adopt the high tariffs he had campaigned on, raising prices of consumer goods and inputs that US households and firms had to pay. The result would beThis article was written byJeffrey Frankel478 FollowersJeffrey Frankel is Harpel Professor of Capital Formation and Growth at Harvard University’s Kennedy School of Government. He is a Research Associate of he National Bureau of Economic Research, where he is also a member of the Business Cycle Dating Committee, which officially declares recessions. Appointed to the Council of Economic Advisers by President Clinton in 1996 and subsequently confirmed by the Senate, he served until 1999. His responsibilities as Member included international economics, macroeconomics, and the environment. Before moving East, he had been professor of economics at the University of California, Berkeley, having joined the faculty in 1979. Other past appointments include the Federal Reserve Board, Institute for International Economics, International Monetary Fund, and Yale. His research interests include international finance, currencies, monetary and fiscal policy, commodity prices, regional blocs, and global environmental issues. He graduated from Swarthmore College and received his PhD from MIT. Visit Jeffrey Frankel's Weblog (https://www.jeffrey-frankel.com/)Comment(1)