At the core of President Trump’s State of the Union address was a calculation that he can persuade Americans that the economy is in better shape than many think it is. In touting “a turnaround for the ages,” the president opted against sending a message to voters that he understands the anxiety that polling shows is widely felt. Chicago Fed President Austan Goolsbee echoed the sentiment that the economy has held up well. A steady labor market and solid consumer spending mean the Federal Reserve should be primarily focused on addressing elevated inflation, he said.

President Trump told a national audience on Tuesday that he had unleashed a new age of economic prosperity. One thing he didn’t say: I feel your pain.

“Our nation is back: bigger, better, richer and stronger than ever before,” Trump declared at the start of his speech, which clocked in at a record one hour and 48 minutes.

Polls find that Americans are unhappy with Trump’s handling of the economy. In a Wall Street Journal survey last month, voters gave the president low marks when asked if he cares about “people like you,” is looking out for the middle class and has the right priorities.

But by and large, Goolsbee said, consumer-spending growth and modest unemployment suggest the economy has held up well, making inflation the appropriate target of the Fed’s attention.

Goolsbee, according to a published text of his remarks, said “3% inflation is not good enough—and it’s not what we promised when the Federal Reserve committed to the 2% target.”

Bailey has been the decisive voter on the Monetary Policy Committee over recent meetings, switching his vote to back a cut in December, and then again to secure a hold in February.

Sanae Takaichi’s administration has nominated two professors that, like the prime minister herself, are considered to be in favor of looser monetary policy, analysts say. The yen softened on Wednesday following the announcement as investors weighed whether Takaichi’s choices might signal a delay in the Bank of Japan's efforts to keep raising interest rates.

The Bank of Thailand noted that it’s important to safeguard “medium-term financial stability as well as preserving limited monetary policy space amid heightened uncertainties,”

Research group The Conference Board said Tuesday its consumer confidence index rose to 91.2 from an upwardly revised 89 in January. Economists polled by The Wall Street Journal had expected a reading of 86.8.

The S&P Cotality Case-Shiller National Home Price Index, which measures home prices across the country, rose 1.3% in the 12 months through December, compared with a 1.4% increase in November.

Manufacturing activity in the mid-Atlantic region slowed somewhat in February, dragged by broad-based declines in shipments, demand and employment. The Fifth District Survey of Manufacturing Activity's composite manufacturing index fell to minus 10 from minus 6 in January, the Federal Reserve Bank of Richmond said Tuesday. (Dow Jones Newswires)

Consumer prices rose 3.8% in January from a year earlier, unchanged from December, the Australian Bureau of Statistics said Wednesday. Economists had expected a more modest rise closer to 3.5%.

The consumer-climate index, published Wednesday by research groups GfK and the Nuremberg Institute for Market Decisions, declined to minus 24.7 in its forecast for March from minus 24.2 in February.

• Germany Shows How Difficult It Is to Rewire Relations With China

World trade flows grew at a faster rate last year despite a jump in U.S. tariffs, but are expected to slow this year as the higher duties take their toll, although a boom in AI-related investment may once again offset some of those headwinds. The volume of goods moving across national borders increased by 4.4% in 2025, a pickup from the 2.5% rate of growth recorded in 2024, according to figures released Wednesday by the Netherlands Bureau for Economic Policy Analysis—also known as the CPB—which has long tracked world trade as a key influence on the Dutch economy.

9:30 a.m.: Richmond President Thomas Barkin speaks at Northern Virginia Chamber event
11 a.m.: Federal Reserve Bank of Kansas City President Jeffrey Schmid speaks before the Economic Club of Colorado
1:30 p.m.: Federal Reserve Bank of St. Louis President Alberto Musalem speaks at Missouri Athletic Club Speaker Series event

8:30 a.m.: Unemployment Insurance Weekly Claims Report - Initial Claims
10 a.m.: Federal Reserve Vice Chair for Supervision Michelle Bowman appears before senate committee hearing
11 a.m.: Federal Reserve Bank of Kansas City Survey of Tenth District Manufacturing

Does uncertainty about tariffs affect consumers' spending plans? It's a difficult question for economists, because tariff uncertainty usually comes with actual changes in tariff policy, so it's hard to tell whether the uncertainty or the policy changes are causing changes in consumer spending. In a new paper, Cleveland Fed researchers tackled the problem with a cleverly designed survey. They find that higher expected tariff levels increase spending plans, because consumers want to buy before tariffs land. But setting aside tariff levels, a 1% increase in uncertainty about tariffs reduces the likelihood that a household plans to purchase a durable good by 0.23 percentage point. The effect is even stronger for cars and other major purchases, where a 1% increase in tariff uncertainty causes a 1 percentage point fall in purchasing plans. — Matt Grossman

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to vicky.huang@wsj.com.