'Buckle in': Expert warns of 'classic inflationary spiral' as Trump move forebodes 'disaster scenario'

04 April

President Donald Trump announcing tariff plans outside the White House on April 2, 2025, Photo via White House / Flickr.

Global economic analyst Rana Foroohar said Friday the markets have never seen anything like the Trump administration's recent policy actions, warning of a "classic inflationary spiral" and a "disaster scenario."

"Trade war is overshadowing everything," she said during an appearance on CNN Friday morning. "The markets have never seen anything like the policy actions that we have just seen."

"We have a tumbling dollar. We have a tumbling market. At the same time, we could see a sharp uptick in inflation," Foroohar said.

Foroohar, who is an associated editor at the Financial Times, noted that people are going out and buying cars because they think the price will increase dramatically in the next few days, weeks, and months. "That's a classic inflationary spiral. Now, that would mean that even with a weakening economy, the Fed might have to raise rates that would just put things into a complete tailspin," she said.

The analyst further warned that this potential situation could make President Donald Trump try to fire Jay Powell, the Fed chair.

"If that happened, and you saw a sense that the entire central banking system was being compromised... Buckle in, because that's when investors see this is the U.S acting like an emerging market," she said.

"And the world is in a complete full blown economic crisis."

On Wednesday President Trump disrupted the global trading system on by introducing a sweeping set of global tariffs. He argued that the United States is experiencing a serious economic crisis due to trade imbalances with various countries around the world. But some economic experts disagree.

Scott Lincicome, vice president of general economics at the Cato Institute, told the New York Times in a report published Thursday that declaring the current trade deficit a national emergency is “beyond a stretch" and that "these numbers are just made up."

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