An index of future economic activity fell again in March while President Donald Trump continued his attacks Monday on Federal Reserve Chairman Jerome Powell.

The combination sent the Dow Jones Industrial Average tumbling again Monday, with the index falling by more than 800 points in the first hour of trading. Analysts say the markets and the economy are at risk until uncertainty over the future of Trump’s sweeping import tariffs and other economic proposals goes away.

The Conference Board’s leading economic index fell 0.7% for the month, following a 0.2% decline in February that was revised slightly upward from its prior estimate.

“The US LEI for March pointed to slowing economic activity ahead,” Justyna Zabinska-LaMonica, senior manager, business cycle indicators, at the business group wrote in an analysis. “March’s decline was concentrated among three components that weakened amid soaring economic uncertainty ahead of pending tariff announcements: 1) consumer expectations dropped further, 2) stock prices recorded their largest monthly decline since September 2022, and 3) new orders in manufacturing softened.”

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“That said, the data does not suggest that a recession has begun or is about to start,” Zabinska-LaMonica added. “Still, the Conference Board downwardly revised our US GDP growth forecast for 2025 to 1.6%, which is somewhat below the economy’s potential. The slower projected growth rate reflects the impact of deepening trade wars, which may result in higher inflation, supply chain disruptions, less investing and spending, and a weaker labor market.”

That assessment falls squarely in line with most private-sector economists’ forecast for a slowing economy that has the potential to slip into recession, depending on whether consumers pull back on spending or the tariffs prove to have a significant effect on the economy and inflation. Although Trump has proposed widespread tariffs at a level not seen since the Smoot-Hawley levies of the 1930s, he has also retreated on many of them.

“Investors and businesses came into this year with misplaced optimism that President Trump (empowered by the Republican electoral sweep) would promote pro-growth policies and fuel higher risk asset prices,” Bob Doll, CEO and chief investment officer at Crossmark Global Investments, wrote in a client note Monday morning. “In a matter of months, Trump has instead effectively sidelined the U.S. exceptionalism theme, triggered a significant stock market correction, severely impaired what was a strong U.S. economy, and is approaching the brink of a ‘crisis of confidence.’”

“With hindsight, President Trump’s conflicting mix of economically supportive policies (tax cuts and deregulation) and stagflationary isolationism (widespread tariffs and deportation/anti-immigration) created confusion at best, and economic damage at worst,” Doll added. “The market reaction has been clear that investors are losing confidence in Trump’s policies.”

Adding to the angst is Trump’s latest attack on the independence of the Fed, following comments last week from Powell that his tariff policies could lead to “more persistent” inflation. Trump responded on Thursday with a broad attack on Powell and doubled down on Monday.

“‘Preemptive Cuts’ in Interest Rates are being called for by many. With Energy Costs way down, food prices (including Biden’s egg disaster!) substantially lower, and most other ‘things’ trending down, there is virtually No Inflation,” Trump said. “With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW. Europe has already ‘lowered’ seven times. Powell has always been ‘To Late,’ except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?”

While inflation has come down significantly since the middle of 2022, when the aftereffects of the COVID-19 pandemic were disrupting the economy, it remains above the Fed’s 2% annual goal and grocery prices are still rising. Oil prices, however, have fallen on a weakened global economic outlook, bringing consumers relief at the gas pumps.

But Powell and others are worried that without a clear picture on how high tariffs might go, or for how long, there is a lingering expectation of higher inflation in the future. Meanwhile, many businesses say they lack clarity on how to proceed with investment and hiring decisions, an environment that could lower economic growth.

“The late-stage economic expansion continues for now, but tariffs and their associated uncertainty loom as a key risk,” wrote Jason Pride, chief of Investment Strategy & Research, and Michael Reynolds, vice president of investment strategy at Glenmede Trust. “The economy is closer to recession due to an event-driven tariff shock. The probability of recession within the next 12 months is now ~40%.”

The attacks on the Fed – most experts believe the president does not have the authority to fire a Fed chairman, but Trump is challenging a law before the Supreme Court that could affect that – could further complicate matters for Trump and his GOP allies in Congress. They need lower interest rates to help them reduce the interest on the federal debt as they prepare a budget that envisions major tax cuts and increased spending in some areas.

But investors who buy the U.S. government’s debt may want higher rates on their bonds if they perceive that America is no longer as safe an investment, and that would drive up borrowing costs.

Continued high interest rates have strained the finances of consumers, with mortgage rates on the rise again. A recent survey from Legal Shield finds that inquiries about bankruptcy have increased sharply in the past few months.

“Bankruptcy inquiries hit the highest we’ve seen since early 2020, just before Americans’ checkbooks were boosted by COVID checks from the government,” said Matt Layton, LegalShield senior vice president of consumer analytics. “When you combine record debt, rising delinquencies, and prolonged financial stress, topped by price pressures driven by tariff uncertainty, the risk of a summer surge in bankruptcy filings becomes very real.”