Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis.

Good afternoon. Today is Tuesday, February 25th, and I'm your host, Kim Khan. Our top story so far. Is it a crisis of confidence?

The conference board's February measure of consumer confidence saw the largest

drop since August 2021 amid a broad range of concerns, including inflation, future business conditions,

and the labor market. The index dropped to 98.3 from 105.3 in January and below the forecast for

a smaller drop to 103. It was the third consecutive month-on-month

decline, bringing the index to the bottom of the range that has prevailed since 2022. Of the index's

five components, only consumers' view of present business conditions improved. Along with general

souring of consumers' moods, their 12-month inflation expectations ramped up to 6% in February from 5.2% in January.

The present situation index declined 3.4 points to 136.5.

The Ford Expectations Index sank 9.3 points to 72.9, an 8-month low, and below the

threshold of 80 that usually signals a recession.

Panthean macroeconomist Samuel Toombs says consumers are, quote, finally smelling the coffee.

The conference board survey mirrors the Michigan survey in showing that consumers' confidence has deteriorated sharply in the face of threats to impose large tariffs and a slash federal

spending and employment, he said.

While references to inflation and prices in general continue to rank high and write-in responses,

there was a sharp increase in mentions of trade and tariffs back to a level unseen since 2019,

Stephanie Gitchard, senior economist Global Indicators at the conference board said.

Most notably, comments on the current administration and its policies dominated the responses.

Toombs added,

Growth in real after-tax income likely will continue to slow this year,

weighing strongly on spending growth now that households have mostly depleted their excess savings.

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