US consumers are exhibiting caution in their spending habits as inflation continues to rise, with core inflation hitting 2.8%, surpassing expectations. Concerns over rising prices and potential stagflation are growing, as moderate spending contrasts with increasing inflation rates. The recent data reveals that personal income rose, but consumer spending increased only slightly, indicating that Americans are saving more amid fears tied to escalating tariffs from the Trump administration. This economic uncertainty is affecting consumer confidence, leading to a sour mood and a decline in market sentiment. The Federal Reserve faces a challenging dilemma, grappling with sticky inflation while trying to gauge the impact of major trade policies. As inflation indicators remain high, the market reacts negatively, reflecting fears of a possible stagnation in economic growth.